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COMPANY OF THE DAY : FIRST SOLAR

The turmoil in China has resulted in some uncertainty in the country's solar market, opening the door for western players such as First Solar to compete with the domestic manufacturers. In a recent note we discuss why they will still be at a disadvantage in China.

See Complete Analysis for First Solar
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FORECAST OF THE DAY : CHARLES SCHWAB'S AVERAGE TRADES PER ACCOUNT

Charles Schwab's trading volumes have been relatively subdued in recent years, but have been fairly strong so far in 2015. We currently forecast trades per account to increase marginally for full year 2015, and see solid growth thereafter.

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United Technologies Logo
  • commented 9/2/15
  • tags: UTX
  • Automotive Lighting Market: Global Industry Analysis and Opportunity Assessment 2015-2025 by Future Market Insights

    Lighting, being an essential component an automobile, acts a substantial role in automobile safety. Major use of light in automobile includes clearing the visibility in darkness and bad weather condition, driver's intentions regarding direction, detect vehicle on the road. In addition to that lightings also grace the interior and exterior look of automobiles. Lights are positioned at different places in an automobile – front, rear side and interior. Growing demand of environmental friendly solutions from OEMs influence manufacturers to develop more energy efficient automobile lighting

    Automotive Lighting Market: Drivers & Restraints

    Automobile lighting manufactures are actively involving in the continuous ongoing development in automobile industry by focusing on the efficiency improvement of lighting. Increasing passenger car penetration in the developing countries such as China and India, aided by the growing personal income rate is expected to spur the growth of automotive lighting market during forecast period.

    Browse Full Report@ http://www.futuremarketinsights.com/reports/automotive-lighting-market

    Automotive Lighting Market: Segmentation

    On the basis of position, automotive lighting market is broadly segmented as:

    Front

    Rear

    Side & Interior

    On the basis of vehicle type, the automotive lighting market is segmented into:

    Passenger Car

    Light Commercial Vehicle

    Heavy Commercial Vehicle

    Two – Wheeler

    On the basis of technology, the automotive lighting market is segmented into:

    Halogen

    Xenon

    LED

    In addition, report also includes automotive lighting market segmentation on the basis of channel type:

    OEMs

    Aftermarket

    Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-gb-621

    Automotive Lighting Market: Region-wise Outlook

    Asia – Pacific region owing to the fast growing automotive industry in developing countries such as India, China and South Korea is expected to show a significant growth in the automotive lighting market. With rapid technological advancement and growing energy efficiency demand in automobile industry, automotive lighting market is expected to represent substantial growth at a significant CAGR during the forecast period.

    Automotive Lighting Market: Key Players

    Some of the players in the market we identified includes General Electric, Hyundai Mobis., Hella KgaA Heuck & Co, Stanley Electric Co Ltd, Osram GmbH, Kononklijke Ichikoh Industries Ltd.,Philips N.V, Ichikoh Industries Ltd, Koito Manufacturing Co., Ltd, Valeo S.A, Magneti Marelli S.P.A and Zizala Lichsystems GmbH [ less... ]
    Automotive Lighting Market: Global Industry Analysis and Opportunity Assessment 2015-2025 by Future Market Insights Lighting, being an essential component an automobile, acts a substantial role in automobile safety. Major use of light in automobile includes clearing the visibility in darkness and bad weather condition, driver's intentions regarding direction, detect vehicle on the road. In addition to that lightings also grace the interior and exterior look of automobiles. Lights are positioned at different places in an automobile – front, rear side and interior. Growing demand of environmental friendly solutions from OEMs influence manufacturers to develop more energy efficient automobile lighting Automotive Lighting Market: Drivers & Restraints Automobile lighting manufactures are actively involving in the continuous ongoing development in automobile industry by focusing on the efficiency improvement of lighting. Increasing passenger car penetration in the developing countries such as China and India, aided by the growing personal income rate is expected to spur the growth of automotive lighting market during forecast period. Browse Full Report@ http://www.futuremarketinsights.com/reports/automotive-lighting-market Automotive Lighting Market: Segmentation On the basis of position, automotive lighting market is broadly segmented as: Front Rear Side & Interior On the basis of vehicle type, the automotive lighting market is segmented into: Passenger Car Light Commercial Vehicle Heavy Commercial Vehicle Two – Wheeler On the basis of technology, the automotive lighting market is segmented into: Halogen Xenon LED In addition, report also includes automotive lighting market segmentation on the basis of channel type: OEMs Aftermarket Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-gb-621 Automotive Lighting Market: Region-wise Outlook Asia – Pacific region owing to the fast growing automotive industry in developing countries such as India, China and South Korea is expected to show a significant growth in the automotive lighting market. With rapid technological advancement and growing energy efficiency demand in automobile industry, automotive lighting market is expected to represent substantial growth at a significant CAGR during the forecast period. Automotive Lighting Market: Key Players Some of the players in the market we identified includes General Electric, Hyundai Mobis., Hella KgaA Heuck & Co, Stanley Electric Co Ltd, Osram GmbH, Kononklijke Ichikoh Industries Ltd.,Philips N.V, Ichikoh Industries Ltd, Koito Manufacturing Co., Ltd, Valeo S.A, Magneti Marelli S.P.A and Zizala Lichsystems GmbH
    Apple Logo
  • commented 9/1/15
  • tags: MSFT AAPL
  • New Websites

    It's great to see that the computer world is changing constantly. There are increasingly more site which facilitate the lives of users. This is especially true in the field of high-tech. In addition, other sites specialize in high-tech deals allowing you to save on your everyday purchases. [ less... ]
    New Websites It's great to see that the computer world is changing constantly. There are increasingly more site which facilitate the lives of users. This is especially true in the field of high-tech. In addition, other sites specialize in <a href="http://www.dealoscope.com/6-high-tech-hot">high-tech deals</a> allowing you to save on your everyday purchases.
    DATA Logo
    Factors That Could Potentially Trigger Movement In Tableau’s Stock Price
  • By , 9/1/15
  • tags: DATA-BY-COMPANY DATA QLIK SAP ORCL
  • Tableau ‘s (NYSE:DATA) customer base has grown immensely with the increase in demand for data discovery based Business Intelligence (BI) software, and we believe that the company is well on track to acquire more than 70,000 customers by 2022. Tableau’s “Land and Expand” strategy has been very successful thus far, and will continue to help the company grow its revenues in the years to come. Consequently, we believe that Tableau’s revenues will increase from $413 million in 2014 to over $2 billion by the end of our forecast period. Our price target for Tableau stands at $111, implying a premium of around 15% to the market. However, there are certain triggers and plausible developments that can move the stock’s value significantly in the next couple of years. Specifically, we believe that Tableau’s growing enterprise-level capabilities could allow the company to increase its pricing at a higher rate, which could lead to a 10% upside for the stock. Conversely, increased competition from traditional vendors as well as a number of emerging companies could lead to a loss of potential customers for Tableau, resulting in a 15% correction.
    3M Logo
  • commented 9/1/15
  • tags: MMM
  • Welcome Back Full Movie Online

    Welcome Back Full Movie Online [ less... ]
    Welcome Back Full Movie Online Welcome Back Full Movie Online
    RHHBY Logo
    Roche Diagnostics Roundup: Gradual Addition To Portfolio
  • By , 9/1/15
  • tags: RHHBY JNJ PFE
  • Roche Holdings  (NASDAQ:RHHBY) has been making small acquisitions to gradually bolster its diagnostics portfolio, which constitutes roughly 15% of the company’s value according to our estimates. The industry’s overall growth has slowed down. Bigger companies are likely to acquire budding diagnostics startups that can bring innovation and new technologies to the table, thereby making a difference. The incremental value addition is likely to be small because we don’t expect any dramatic change in diagnostics profit forecast. However, there have been some notable acquisition in recent weeks that are worth talking about. It is interesting to note that while J&J has been trimming its medical devices and diagnostics division, Roche has been building through small acquisitions.
    YHOO Logo
    Yahoo Looks To Boost Revenues With Native Mobile Video Ads Support For Developers
  • By , 9/1/15
  • tags: YHOO
  • Yahoo! (NASDAQ:Yahoo) has been struggling to post more meaningful growth in its topline and bottom line over the past few year. In the recently held developer’s conference in New York, Yahoo announced that it will enable mobile developers integrate native video ads into their apps as users. This move signifies that most users now use mobile devices to browse the Internet. Moreover, these users spend more time in apps installed on a mobile devices than on mobile browsers. As a result, monetizing that content has become imperative for companies such as Yahoo that are focusing on delivering content on a mobile platform. In this article, we will explore the video ads industry, and how Yahoo’s offering plans to leverage the popularity of content to rake in more ad dollars. Click here to see our complete analysis of Yahoo! The Advancing World Of User Generated Content, Especially Videos On the supply side, user generated video content is on the rise due to a number of factors, including the proliferation of low cost but high quality video equipment, the increase in Internet penetration and bandwidth, and the low storage costs of online content. Additionally, premium video content is also growing because many traditional media companies are boosting their online presence to capture a shift of viewers moving online for streaming digital content. On the demand side, online video content is becoming increasingly popular due to broader Internet access and the advent of smart connected devices (which include tablets, smartphones and notebook PCs). Furthermore, newer video formats are coming to fore that allow easy rollout of pre-roll and interstitial video ads. As online video content empowers users to choose what, when and over which medium to watch content, viewers are spending more time viewing videos online rather than on traditional TV. We expect these trends will continue to drive demand and supply for online video content in the future. Trends Video Ad Spending The change in consumer behavior is prompting the migration of TV ad budgets to online spending. As a result, the video advertising industry has become fragmented, primarily due to the growing popularity of online video streaming. Advertisers now have to manage their ad budgets across different media and screen sizes. While TV ad spending was at $66 billion in the U.S. during 2014, mobile ad spending was close to $12.5 billion during the year, according to Interactive Advertising Bureau (IAB). Furthermore, digital video ad spending is increasing at a faster pace and much of this growth is coming from mobile devices. However, online video ads cost per impression (CPM) still lags TV CPM. While a Turns study estimates that cost per impression (eCPM) for online video is in the $8-$12 range, TVB estimates this at $25 for TV. We expect TV and digital video advertising spend to converge as multi-platform and multi-screen video advertising get integrated. Yahoo’s Looks to Monetize Mobile Content with Video Ads Content is the driving force behind display ad revenue and affects both users and advertisers on Yahoo. Users care about the quality of content and personalized information, which together lead to better engagement. According to a report by Flurry, the time spent in the mobile browser is a rapidly shrinking part of that pie, with more than 90 percent of time spent in apps. And media consumption accounts for more than half of that app time. Yahoo is aiming to help developers to monetize their content by integrating native mobile video ads. These ads spots can then be offered on Flurry, which has an RTB platform called the Flurry marketplace that enables automated sales of ads across different ad properties. It plans to combine customized content by developers with bespoke ads to improve user experience. This can not only improve user engagement but also boost the number of ads it can sell through Flurry. Furthermore, the number of unique visitors is vital for Yahoo’s ad revenues as more people visiting the apps generally translate into more pages content consumed across apps powered by Flurry. We currently have a  $42.58 price estimate for Yahoo!, which is 30% above the current market price. Understand How a Company’s Products Impact its Stock Price at Trefis View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    SYMC Logo
    Opportunities Abound for Symantec as a Pure-Play Security Software Vendor
  • By , 9/1/15
  • tags: SYMC EMC
  • Security software vendor Symantec Corp. (NYSE:CRM) will complete the sale of its information management business, Veritas, to private equity firm Carlyle by the end of the current calendar year. With the sluggish information management business out of the way, Symantec needs to look to new expansion avenues to revive floundering revenue growth of its core security business. In this report, we look at three areas that may hold the key to Symantec’s recovery as a pioneering security software company. We have previously stated that with the prospects of the Consumer Security Software business looking slim, Symantec’s revival rests in the Enterprise Security Software business. The combination of a highly dynamic and constantly-evolving software industry, rising corporate hacking incidents, and the advent of cloud computing create the need for a treasure trove of new enterprise security software products just waiting to be developed and sold. Further, there have been new indications that the backbone of the consumer security software segment, antivirus, may be down but not out – yet. In light of the above, we believe that Symantec could capitalize on the following three opportunities to revive growth: Cloud Security Software Internet of Things Security Software Antivirus Software Our price estimate of $26 for Symantec Corp. is about 20% higher than its current market price. See our complete analysis for Symantec Corp. here Cloud Security Software The global cloud computing market was estimated to be worth over $150 billion in 2014. We further estimate that the global cloud computing market comprised 35% of the global enterprise software market, and its share will increase to over 70% by 2021. This clearly indicates that cloud computing is the future of the world’s processing requirements, be it in the form of applications (software-as-a-service), platforms (platform-as-a-service) or infrastructure (infrastructure-as-a-service). Just like legacy on-premise systems, cloud computing requires robust security systems, which is where Symantec steps in. The global cloud security software market is estimated to be worth over $2 billion in 2014, and is expected to grow at a CAGR of 40% to reach $16 billion by 2020. While this is a much smaller market than the existing global security software market, it still presents a fast-growing opportunity for Symantec. Currently, Symantec offers a one-stop solution for cloud security called Protected Clouds . We believe that there is scope for Symantec to step up its research in cloud security and expand its product offerings to suit the diverse needs of cloud users. If the company is able to achieve this, it could put itself at the forefront of a market that is set to expand widely in the near future. Internet of Things Security Software The Internet of Things (IoT) is estimated to be a trillion dollar market and is widely considered to be the next big thing in technological progress. IoT refers to the interconnected devices within a network that can communicate with the users’ mobile devices. Naturally, since communication over a network forms the backbone of IoT, it is imperative that it be secure. The emergence of smart cities is another factor driving the growth of IoT and the need for securing the connected devices. Consequently, the IoT security market is expected to grow at an annual clip of 55% through 2019. This presents a potential goldmine for security software vendors like Symantec, since the IoT market is virtually limitless and so far mostly unexplored. Symantec is already on track to leverage this opportunity and recently announced that it is securing over a billion IoT devices. The number of connected devices is expected to touch 25 billion by 2020, and Symantec is one of the companies leading the charge of securing these devices. Symantec’s IoT security product portfolio currently includes devices security, trust certificates and code protection. The company plans to add security analytics and an IoT platform soon, which will further bolster its offerings in the nascent IoT security segment. Antivirus Software Last year, a senior Symantec executive stated that “antivirus is dead”. The executive claimed that Symantec does not consider antivirus software as a “moneymaker in any way”, but still went on to state that the company has no intentions of abandoning the Norton antivirus suite. Rather, Symantec intends to develop and expand the existing product lines to encompass new threats and technologies. (Read: Symantec’s Revival: The Security Business Holds the Key ) Now, it appears that Symantec may have been right in sticking with antivirus software. According to recent reports, sales of antivirus software are still going strong in some emerging markets like Latin America and Asia Pacific. The antivirus software market is expected to grow at an annual rate of 8% in Latin America and 12% in Asia Pacific through 2020. Latin America and the Asia Pacific region may account for a relatively small proportion of the global market, but the fact remains that there are still markets where antivirus is still going strong and is expected to continue to do so. According to our estimates, Symantec held 10% share of the global consumer security software market in 2014. We currently expect Symantec’s market share to decline further to 4% by 2021 due to the weakness in sales of its Norton suite. However, Symantec could link its antivirus products to the exponential growth in cloud computing and mobile usage by providing software security products for these platforms, thereby protecting its market share. We estimate that if Symantec is able to restrict the decline of its Consumer Security Software market share to 9% by 2021, it could result in a 30% upside to our current valuation of the company. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    SIRI Logo
    Looking At The Significance Of Sirius XM's Latest $2 billion Share Repurchase Program
  • By , 9/1/15
  • tags: SIRI P AAPL GOOG
  • Following the stock market carnage last week, when  Sirius XM ‘s (NASDAQ:SIRI) shares fell almost 10%, it announced the plans to buyback common stock worth $2 billion. Through share repurchases, the satellite radio company is looking to boost returns to investors, who have received paltry performance from other avenues. Sirius XM’s stock has not moved much over the past two years and returns to its shareholders in the form of dividends have been limited. The company has announced dividends only once in its history, paying investors $327 million in cash dividends in 2012. On the other hand, the company has been generous with its buybacks, approving four share repurchase programs worth an aggregate of $8 billion since 2012. Apart from providing returns to shareholders and encouraging them to stick with the company, share buybacks help create artificial demand in the market by reducing the supply of shares, which subsequently increases their value. Since the announcement of its latest round of share repurchases, Sirius XM’s stock has gone up almost 5%. Another reason for buybacks can be the fact that the management is confident in the company stock’s long term potential and wants to purchase shares at a relatively cheaper price.  Our current price estimate for the company at $3.94, is about 5% ahead of the current market price.
    TGT Logo
    Target Betting Big on Digital Transformation, Likely To Yield These Benefits
  • By , 9/1/15
  • tags: TGT
  • Target (NYSE:TGT) has had an impressive first half in the current fiscal, marked by growing sales despite a challenging environment for retailers. It has also undertaken a massive cost reduction program, aiming to save up to $2 billion by the end of fiscal 2017 (ending January 31st). An earnings beat in the recently concluded quarter led the company to raise its full-year guidance. Looking ahead, we believe Target has quite a transformation to undergo to keep its sales growth ticking. The company’s efforts are evident from its increasing investments in information technology, distribution, and other areas.  In fact, the $2 billion that will be saved via cost reductions will primarily be invested in this transformation to make Target a multi-channel retailer. The change is already underway as the company grew its digital channel sales by 30% in the second quarter, on top of more than 30% growth seen in the same period an year ago. However, only 2.7% of the total sales are generated from the digital channel currently. One of the initiatives that will likely enable future growth in this channel is the company’s plan to use its all of its stores as distribution centers, a model that electronics retailer Best Buy has successfully implemented. Currently, digital orders are being delivered only from 140 of the company’s stores, a number that is expected to rise to 450 stores by the end of the year. At the same time, competitors such as Amazon have also been spending huge amounts on developing fulfillment centers near major metro areas. In addition to boosting digital channel sales, investments in technology will benefit Target in other important ways as well. Let us take a look at some of them. See our complete analysis for Target Relevant Promotions at the Right Time Target is currently experimenting with Apple’s iBeacon technology, which is a software that helps iOS users connect to third-party beacons deployed in real-world settings. These beacons track the location of a customer within the store and alert them to a deal on a nearby product as they pass by. Along with generating incremental revenue for the retailer, this also helps consumers to save on products that interest them. If successfully implemented, this technology will take targeted promotions to the next level at Target. Better Insight Into Customer Behavior As Target expands its online operations and gathers data from multiple channels, it could generate additional insights into customer behavior. For example, a combination of information gathered from a particular customer’s online browsing habits and data gathered from the iBeacon technology could be used to generate highly relevant in-store recommendations for customers. While methods like this will help Target increase the spend per customer, the same information can also be used to make store-wide improvements. Real estate is a major cost for retailers like Target, which makes store space utilization all the more critical. While retailers experiment with the physical placement of products in a store, metrics that indicate the effectiveness of the method have been limited. With the availability of new technology such as iBeacon, Target will have more data at hand to measure the effectiveness of various product placement designs. Also, movement patterns of customers through the store will help the company allocate appropriate merchandise to appropriate in-store regions, which will likely boost the revenue generated per square foot . According to reports,  Target plans to conduct a trial by deploying beacons at 50 stores throughout the country. If it succeeds, this technology will make a significant contribution to Target’s transformation into a multi-channel retailer. Our price estimate for Target stands at $79, which is slightly above the current market price. View Interactive Institutional Research (Powered by Trefis): Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research Chart Data Source: The Motley Fool
    RAD Logo
    Rite Aid's Sales Growth Slows As Newly Launched Generics Are The Likely Culprit
  • By , 9/1/15
  • tags: RAD CVS WAG
  • Rite Aid  (NYSE:RAD), the third largest drugstore chain in the U.S., is the only drug store chain in the top three that still releases monthly sales data. While sales in the pharmacy industry mostly remain stable, the extra detail helps us adjust our expectations for the company’s performance prior to their earnings release every quarter. In the previous quarter (ending May), Rite Aid averaged a year-over-year growth rate of 2.9% in the three-month period, slightly higher than the 2.7% reported during the same period a year ago. How Did Rite Aid’s Sales Fare After Q1? Two months have gone past, and we now have another two months’ sales data to examine. In both June and July, the company’s same store sales grew a moderate 2.4%, which is significantly lower than the 4.3% growth (average) registered during last year’s June and July combined. Growth rates slowed in both pharmacy and front-end segments, which grew 3.4% and 0.2%, respectively. Last year’s figures were notably higher at 5.7% and 1.2%, respectively. While many factors could be at play here, some of the deficit could be attributed to the negative impact from new generic introductions. Generics, being cheaper than branded drugs, drag revenues down for pharmacies. On average, the negative impact of new generic introductions on pharmacy sales in the two-month period was 224 basis points, 20% higher compared to last year. As we mentioned in another post, $47.5 billion in industry sales (in the prior year) will come under threat of patent expiry this year, according to Evaluate Pharma, a firm provides market intelligence, financial data & valuation tools for pharma and biotech industries. As more patents expire, generic equivalents replace branded versions and lead to a lower revenue per prescription .  Telehealth Stations to be Introduced at Select Stores All major pharmacy chains, including CVS Health (NYSE:CVS), Walgreens (NASDAQ:WBA) and Rite Aid, have been investing in setting up health clinics within their stores. In a recent post, we discussed how demand for convenient care is driving growth of these clinics. Cost is another factor driving demand for walk-in retail clinics, which have a fixed charge and charge less than other settings such as urgent care centers or physician clinics. Availability at short notice, shorter waiting times and longer opening hours, compared with doctors’ offices, give the retail clinics an upper hand. While Rite Aid is behind both CVS and Walgreens, in terms of the number of retail clinics, it seems to be looking for newer ways to capture demand. The company recently announced a partnership with HealthSpot, a pioneer in patient and provider driven healthcare technology. These stations will be equipped with videoconferencing systems through which physicians will remotely interact with consumers. They will also have interactive medical devices like a stethoscope, a pulse oximeter, etc which will enable doctors to examine patients digitally. These booths could also potentially drive additional traffic to the stores, boosting sales. Rite Aid announced that it would open HealthSpot stations in 25 of its stores, stressing on their transformation into a retail healthcare company. Earlier, the company also added PBM services to its portfolio  through the acquisition of Omnicare, aimed at making it a well rounded healthcare service provider. View our detailed analysis for Rite Aid View Interactive Institutional Research (Powered by Trefis): Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research Sources: Rite Aid Investor Relations
    GM Logo
    What GM Is Doing To Protect Itself From The China Slowdown
  • By , 9/1/15
  • tags: GM F TM HMC
  • The most important market for General Motors (NYSE:GM) is China, the world’s biggest auto market. The company sells more cars there than any other region, even more than in the U.S. It is also the second biggest seller of new vehicles in the region after Volkswagen. As a result, the changing economic situation in China is of utmost importance to the company. In recent months, there have been signs of slowing economic growth in China. Stock market crashes usually impacts the economy at large as capital reductions diminish wealth. Accordingly, the Chinese equities crash has made consumers nervous and as a result new car sales have declined for three months in a row. Moreover, international car makers are facing pressure from up and coming local Chinese players for market share. Additionally, the Chinese Government has devalued the yuan, which means that new car sales will translate into fewer U.S. dollars, the currency in which GM reports its financial results. We have a  $38 price estimate for General Motors, which is about 20% more than the current market price . What GM Is Doing To Protect Itself in China In the second quarter of fiscal 2015, GM’s equity income from Chinese joint ventures rose slightly to $503 million. The U.S. auto maker managed to report a small increase in unit sales despite prevailing market conditions. The company also managed to avoid pricing pressures and new SUV models along with increased sales of Cadillacs led to a 10.2% margin in the region. More interesting, however, was the company’s outlook for the region in the second half of the year. The company guided for a low-to-mid single digit growth in unit sales in new vehicle sales for the full year in China. There were two reasons behind this outlook: 1) Many auto makers, including GM, are planning to introduce newer models in the second half of the year, which should boost demand. 2) The second half of the year is usually favorable for auto makers in China. Sales are driven by national holidays in the fourth quarter of the year. SUV Sales Can Boost Profits Even though new vehicle sales have declined on a year-over-year basis for three straight months, sales of SUVs have continued to rise. In July, as overall sales declined by 7%, SUV sales increased by 34%. Most of that growth was captured by local Chinese auto makers, but international companies like GM are hopeful that they can capture some of this growth going forward. Earlier this year, the company launched the new Buick Envision. The Envision is a mid-size SUV that could make its way to the U.S. market in the coming period. It is an extremely profitable upscale model that has already been boosting the GM’s results in China. In the first half of the year, GM sold close to 60,000 Buicks in China, helping the Buick brand double its overall sales of crossover SUVs. The Envision is available on the market from a starting price of $43,000 and ranges up to $55,000. Given that the Envision is closely related to the Chevrolet Equinox, which sells in the U.S. for around $26,000, it has been extremely profitable for the company. GM is also looking to capitalize on the trend of rising sales of inexpensive SUVs made by local Chinese brands. GM has an affordable China-specific brand called Baojun. This is an attempt to push back against these trends. With Baojun’s help, GM has recently launched two new SUVs — the 560 and the 730. Both are affordably priced (the 560 is available at a price of around $12,000) and the company expects good results from them. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    MDT Logo
    Heavy Currency Headwinds Expected in Medtronic’s Q1 Results
  • By , 9/1/15
  • tags: MDT ABT ISRG
  • Medical devices manufacturer Medtronic (NYSE:MDT) is scheduled to report its fiscal 2016 first quarter results on September 3rd. Medtronic completed the consolidation of Covidien’s acquisition last fiscal year, but significant synergies are not expected to be realized until the second half of fiscal 2016. On the other hand, the company is expected to face substantial currency headwinds in the first quarter, which could drag down its revenue growth and offset the savings from operational efficiencies. The negative impact of adverse currency movements is expected to be up to $1.5 billion in fiscal 2016, over 40% of which is expected materialize the first quarter itself. Medtronic has not provided revenue guidance for the first quarter, but the company is likely to achieve its broad goal of mid-single digit revenue expansion on a comparable constant currency basis. First quarter revenues are expected to benefit from an extra week, which may lift the revenue by an additional 100 to 150 basis points year on year on a comparable constant currency basis. Synergies from the Covidien acquisition are expected to start trickling in from the back half of the current fiscal year. Consequently, the first quarter operating margin may be lower than the 28% to 29% range expected for the full year.
    General Electric Logo
  • commented 9/1/15
  • tags: GE
  • Global Smart Elevator Automation System Market Revenue is Expected to Reach US$ 33,455.6 Mn Over 2015 – 2025, says Future Market Insights

    Future Market Insights (FMI) delivers key insights on the Global Smart Elevator Automation System Market in its latest report titled "Smart Elevator Automation System Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025". The global smart elevator automation system market is projected to expand at a healthy double-digit CAGR of 16.2% during the forecast period due to various factors, regarding which FMI offers vital insights, in detail, in this report.

    On the basis of service, the market has been segmented into equipment installation services, repair & maintenance services and modernization services. The equipment installation service segment accounted for over 57% share of the global smart elevator automation system market in 2014, and is expected to expand at a CAGR of 14.6% over the forecast period. The modernisation service segment is anticipated to expand at the highest CAGR of 18.1% during the forecast period.

    Among all the end users, the residential sector is anticipated to be the largest segment, accounting for 44% share of the overall smart elevator automation system market, by the end of 2025, followed by the commercial sector, accounting for over 30% market share. The components of the smart elevator automation system include ─ card reader, biometric, touch screen and keypad, security and control system, sensor, motor and automation system and building management system. In 2014, the sensor, motor and automation system segment dominated the market, accounting for 69.2% share of the overall segment, and it is expected to remain dominant with a 68.2% market share by the end of 2025. The security and control system was the second largest segment in 2014 and is projected to expand at the highest CAGR of 19.5% during 2015-2025.

    Browse Full "Smart Elevator Automation System Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025" Report at http://www.futuremarketinsights.com/reports/smart-elevators-market

    Growth of the global smart elevator automation system market is mainly driven by increasing demand for energy efficient and high speed elevators, rising investment in infrastructure development projects, growing population and increasing urbanisation in big cities of the world. Major players in the smart elevator automation system market are focusing on developing advanced destination dispatch solutions to gain competitive advantage. For example, in early 2015, ThyssenKrupp Elevator AG developed an intelligent connected monitoring system for smart elevators in collaboration with Microsoft Corporation and CGI Group Inc., to optimize the availability of elevators utilizing IoT capabilities.

    This report covers trends driving each segment and respective sub-segments of the market, and offers analysis and insights on the potential of the smart elevator automation system market in specific regions. By region, Asia Pacific Excluding Japan (APEJ) dominated the smart elevator automation system market with over 32% share of the overall market in 2014 and is anticipated to remain dominant till the end of 2025. This is attributed to the significant increase in number of high-rise buildings in big cities in emerging economies, such as China and India, and rise in public expenditure on infrastructure development projects in the region. High-rise buildings in major countries of North America, such as the U.S. and Canada are increasingly equipped with smart elevator automation systems. This is attributed to the government regulations related to the usage/installation of smart elevator automation systems for ensuring safety. Western Europe and Eastern Europe collectively accounted for over 29.8% share of the overall smart elevator automation system market in 2014. Among all the regions, APEJ is anticipated to expand at the highest CAGR between 2015 and 2025, followed by Latin America and Japan. The MEA region is projected to expand at a CAGR of 13.4% over the forecast period, owing to rapid implantation of smart elevator automation systems in high rise buildings in GCC countries.

    For more insights on Global Smart Elevator Automation System Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-469

    Key players in the global smart elevator automation system market include KONE Corporation, United Technologies Corporation, ThyssenKrupp Elevator AG, Tyco International Limited, Fujitec Co. Ltd. and Mitsubishi Electric Corporation. Strategic partnerships, collaborations and joint ventures are some of the major strategies followed by key players operating in the smart elevator automation system market to outperform competitors.

    Press Release: http://www.futuremarketinsights.com/press-release/smart-elevators-market
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    Global Smart Elevator Automation System Market Revenue is Expected to Reach US$ 33,455.6 Mn Over 2015 – 2025, says Future Market Insights Future Market Insights (FMI) delivers key insights on the Global Smart Elevator Automation System Market in its latest report titled "Smart Elevator Automation System Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025". The global smart elevator automation system market is projected to expand at a healthy double-digit CAGR of 16.2% during the forecast period due to various factors, regarding which FMI offers vital insights, in detail, in this report. On the basis of service, the market has been segmented into equipment installation services, repair & maintenance services and modernization services. The equipment installation service segment accounted for over 57% share of the global smart elevator automation system market in 2014, and is expected to expand at a CAGR of 14.6% over the forecast period. The modernisation service segment is anticipated to expand at the highest CAGR of 18.1% during the forecast period. Among all the end users, the residential sector is anticipated to be the largest segment, accounting for 44% share of the overall smart elevator automation system market, by the end of 2025, followed by the commercial sector, accounting for over 30% market share. The components of the smart elevator automation system include ─ card reader, biometric, touch screen and keypad, security and control system, sensor, motor and automation system and building management system. In 2014, the sensor, motor and automation system segment dominated the market, accounting for 69.2% share of the overall segment, and it is expected to remain dominant with a 68.2% market share by the end of 2025. The security and control system was the second largest segment in 2014 and is projected to expand at the highest CAGR of 19.5% during 2015-2025. Browse Full "Smart Elevator Automation System Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025" Report at http://www.futuremarketinsights.com/reports/smart-elevators-market Growth of the global smart elevator automation system market is mainly driven by increasing demand for energy efficient and high speed elevators, rising investment in infrastructure development projects, growing population and increasing urbanisation in big cities of the world. Major players in the smart elevator automation system market are focusing on developing advanced destination dispatch solutions to gain competitive advantage. For example, in early 2015, ThyssenKrupp Elevator AG developed an intelligent connected monitoring system for smart elevators in collaboration with Microsoft Corporation and CGI Group Inc., to optimize the availability of elevators utilizing IoT capabilities. This report covers trends driving each segment and respective sub-segments of the market, and offers analysis and insights on the potential of the smart elevator automation system market in specific regions. By region, Asia Pacific Excluding Japan (APEJ) dominated the smart elevator automation system market with over 32% share of the overall market in 2014 and is anticipated to remain dominant till the end of 2025. This is attributed to the significant increase in number of high-rise buildings in big cities in emerging economies, such as China and India, and rise in public expenditure on infrastructure development projects in the region. High-rise buildings in major countries of North America, such as the U.S. and Canada are increasingly equipped with smart elevator automation systems. This is attributed to the government regulations related to the usage/installation of smart elevator automation systems for ensuring safety. Western Europe and Eastern Europe collectively accounted for over 29.8% share of the overall smart elevator automation system market in 2014. Among all the regions, APEJ is anticipated to expand at the highest CAGR between 2015 and 2025, followed by Latin America and Japan. The MEA region is projected to expand at a CAGR of 13.4% over the forecast period, owing to rapid implantation of smart elevator automation systems in high rise buildings in GCC countries. For more insights on Global Smart Elevator Automation System Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-469 Key players in the global smart elevator automation system market include KONE Corporation, United Technologies Corporation, ThyssenKrupp Elevator AG, Tyco International Limited, Fujitec Co. Ltd. and Mitsubishi Electric Corporation. Strategic partnerships, collaborations and joint ventures are some of the major strategies followed by key players operating in the smart elevator automation system market to outperform competitors. Press Release: http://www.futuremarketinsights.com/press-release/smart-elevators-market
    SNDK Logo
    SanDisk Continues To Focus On Enterprise SSDs Amid Weakness In Other Divisions
  • By , 9/1/15
  • tags: SNDK WDC STX VMW EMC
  • SanDisk (NASDAQ:SNDK) has had a tough first half of 2015 thus far, with its net revenues falling by nearly 20% year-over-year to $2.57 billion in Q1 and Q2 combined. Most of the company’s revenue streams have suffered in the first half of 2015, with the exception of enterprise SSD revenues, which witnessed a massive 64% y-o-y increase to $360 million. On the other hand, the biggest area of concern for the company was the client SSD space, with revenues falling by 55% over the prior year period to $308 million in the first half of the year. Meanwhile, embedded storage (-6%), removable storage (-16%) and other revenues (-18%) faced substantial – but comparatively modest – revenue declines in the first half of the year. In an attempt to further drive growth in the enterprise SSD space, SanDisk announced the release of the CloudSpeed Ultra Gen II enterprise-grade SSD for cloud service provider and software-defined storage vendor environments. The company also announced caching support data service for VMware’s (NYSE:VMW) flagship product vSphere. Below we take a look at the newly introduced enterprise SSD drives for cloud storage and how the data service for virtualized environments could impact SanDisk. We have a revised $66 price estimate for SanDisk’s stock, which is significantly higher than the current market price. SanDisk’s stock price has fallen by about 50% since the beginning of the year. SanDisk’s stock price has fluctuated between $46 and $69 in the last three months.
    C Logo
    Q2 2015 U.S. Banking Review: Total Deposits
  • By , 9/1/15
  • tags: BAC C JPM WFC
  • Data compiled by the Federal Reserve shows that the total deposit base of all U.S. commercial banks is currently at a record high figure of $10.9 trillion. While this is more than double the $5 trillion in total deposits reported in late 2004, a bulk of the growth has come since 2010 – something that can be attributed to the prevalent low interest rate environment. This is because the record-low interest level has led individual as well as institutional investors to shift a bulk of their liquid assets into interest-bearing deposits due to the lack of many lucrative investment options – a phenomenon that in turn has hurt net interest margins for U.S. banks considerably. In this article we detail the changes in deposits at the country’s four largest banks –  JPMorgan Chase (NYSE:JPM),  Bank of America (NYSE:BAC),  Citigroup (NYSE:C) and  Wells Fargo (NYSE:WFC) – over the years.
    BAC Logo
    Q2 2015 Banking Review: Credit Card Charge-Off Rates
  • By , 9/1/15
  • tags: AXP BAC COF C DFS JPM USB WFC
  • Credit card charge-off rates for the country’s largest card lenders nudged lower over the second quarter of the year, reversing the trend of sequential increases over the previous two quarters. While the seasonal card industry has historically reported elevated charge-off levels for the first quarter, steady improvements in overall economic conditions helped keep card default rates stable the last few quarters. In this article, which is a part of our ongoing series detailing the country’s largest card lenders –  JPMorgan Chase (NYSE:JPM),  Bank of America (NYSE:BAC),  Citigroup (NYSE:C),  U.S. Bancorp (NYSE:USB),  Wells Fargo (NYSE:WFC),  American Express (NYSE:AXP),  Discover (NYSE:DFS) and  Capital One (NYSE:COF) – we discuss the trend in their credit card charge-off rates over recent years, and also detail what to expect in the near future.
    TSLA Logo
    Tesla's Business Model Highlights What The Shift To Electric Means For The Auto Industry
  • By , 9/1/15
  • tags: TSLA TM HMC
  • If Elon Musk’s goal with Tesla Motors (NYSE:TSLA) was just to make the best electric car ever, he has already achieved it with the all-wheel drive version of the Tesla Model S P85D. According to Consumer Reports, this model is so good that it literally broke their ratings system. So what now? Given that Tesla has the best car, it should be easy to build a business model around that. But the task Tesla has set for itself is not so easy. Tesla’s goal is to become a dominant player in the luxury vehicle market. This market, which includes Audi, BMW, Mercedes-Benz and Lexus, generates about 5-6 million unit sales per year or $220 billion in revenue. That means that the average price of a vehicle in this segment is around $44,000 at most. In comparison, Tesla’s Model S P85D all-wheel drive retails for a price of around $128,000. Tesla’s stated goal in the past has been to make a successful high-end car and then invest the resulting profits to make a less expensive electric car, using the proceeds to make a $35,000 third generation vehicle. This is not merely a strategy statement:  the structure of Tesla’s Fremont factory literally reflects this idea. Only 20% of the factory is currently used to make Model S vehicles, while the rest lies dark, waiting for its call to action. In order to achieve this goal, Tesla will have to make significant incremental improvements and tweaks to the traditional way in which cars are made, sold and serviced. Below, we take a look at the three broad ways in which Tesla’s business model sets it apart from all other car companies. We have a  price estimate of $170 for Tesla, which is about 30% below the current market price. What the Shift To Electric Means The first and most important thing to appreciate about Tesla is that electric cars are not merely about cutting down on emissions. The shift to electric power transmission fundamentally changes the mechanical complexity of the car. The number of moving parts is reduced drastically, as the drive shaft, fuel tanks, transmission, and internal combustion engines are all removed. This reduced complexity means that the sophistication required to build and design cars changes, which in turn changes not only who can build these vehicles but how they are built. Put simply, if the value in the car industry in the last ten years lay in the engine, the shift to an electric power train means that the value now lies in the battery.  A further shift to self-driving cars might in turn change that value center, but that is a separate discussion. It is quite possible that the manufacture of the drive train, battery, welding, stamping, interiors and the infomatic systems inside cars get modularized and outsourced in the future, just in the way the smartphone industry outsources scale to Shenzhen. On top of this, companies will be able to add their own software capabilities, branding, marketing and distribution to create additional value. However, all this is still some time away. Currently, it is Tesla alone that is pointing to that path. Yet instead of outsourcing, it does everything in house. This ranges from using the most expensive aluminum stamping machine in North America to robotically operating welding machines. Indeed, even the manufacture of the motor that is used in the drive train occurs at Tesla’s Fremont factory. The $5 billion Giga Factory is an attempt to bring battery making in house as well. There is solid economic thinking behind this:  the supply chain involved in the manufacturing and distribution process of a battery is vast, encompassing the mining of elements in South America and their shipment to North America for initial refining and processing. Thence, these raw materials are shipped to Japan or South Korea for further refining and processing, and then back to North America where the finished battery is installed in a car that could be sold across the globe. This is a horribly inefficient process. Tesla’s big move is to bring all these different parts under the same roof. This move alone will save the company a lot of money. Besides savings in labor costs, the amount of lithium required to support Tesla’s sales targets will double the demand for lithium alone.  The increased demand will in reduce the battery’s price.  As the number of single digit percentage reductions add up, the cost of producing and selling a battery can come down by as much as 30%. Given that 25% of the cost of making a car is battery costs, this can result in improved margins and help the company get to its target of a $35,000 Tesla electric car. There’s one other major change that the shift to electric vehicles can have to the auto industry. Currently, car companies rely on a model refresh  and new a model launch model to drive sales. Automakers introduce a model to their line up, upgrading it with new features to it every two to three years before changing the model after about eight to ten years. New model launches and model refreshments are known drivers of new car sales. However, with the reduced number of moving parts and the ability to ship updates through software, this may no longer be necessary. For example, Tesla will be shipping self-driving features to the Tesla Model S 70D cars that it has already sold this fall. Given the increased mechanical simplicity of the power train, there will be greater value according the software systems that control it.  And updates can be extesive:  a recent update on the  Model S was priced $10,000. Direct Sales Another way in which Tesla is going against the grain is by opting to sell vehicles directly to consumers, unlike other car manufacturers which use franchised dealerships. There are two main reasons why Tesla can do this: 1) In addition to significant expertise in the car manufacturing process, Tesla also brings a lot of software expertise. This is manifest in the ability of the Tesla Model S to wirelessly upload data so that technicians can view and fix the car online without even needing to touch the vehicle. If required, they can send technicians who can service the car at your home. Tesla calls these technicians Tesla Rangers. 2) Additionally, this is another place where the reduced mechanical complexity pays the company dividends. Fewer moving parts means fewer points of potential failure, which means that the company doesn’t need to rely on service centers to support the car after it has been sold. The way conventional dealerships are currently set up, they make most of their profits from this after-sale service process. In its absence, dealerships would most hardly make a profit, as they compete so aggressively on vehicle price. Cutting out the middlemen, Tesla can make higher profits. It can also improve the customer buying experience. In this way, Tesla is similar to Apple, which opts to sell its products through its own stores, staffed with its own employees, instead of exposing them to the conflict of interest that emerges when you try to sell through Best Buy or RadioShack. Additionally, Tesla also makes use of Internet sales, allowing customers to customize and purchase a Tesla vehicle online. According to Tesla, this whole process costs the company $2,000 per vehicle sold. So the company decided to tweak this model too. Tesla launched a program that allows a Model S owner to recommend a Tesla vehicle to someone for a $1,000 credit at service centers in the future. And the person who buys the car on the recommendation of an existing Model S owner gets a $1,000 discount on the purchase price. Supercharger Network Tesla is also unique in the way that it not only has to sell cars, it also needs to popularize the technology on which its cars operate in order to sell them. This requires the company to build out a network of charging stations to allow Tesla owners greater range in their travels. The current supply of Supercharging stations allows Model S owners to take free long distance road trips along specific routes. As of the Q2 earnings call, the company has 487 supercharging stations globally and is opening a new one at the pace of one every 24 hours. On average, drivers in California are never more than 42 miles away from a charging station and drivers in Germany 33 miles away. See full analysis for Tesla Motors Understand How a Company’s Products Impact its Stock Price at Trefis View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
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    Why Are The Airlines Splurging and Spending Money On Premium Services?
  • By , 9/1/15
  • tags: DAL UAL AAL JBLU
  • After a decade of making heavy losses, the US airlines have finally started minting money. The prolonged weakness in crude oil prices has enabled the industry to come out of its age-old stigma of being a poor investment. However, the airlines are not taking this success for granted. Most of the US airlines are judiciously investing their excess cash flows in revamping their existing fleet, improving their capital structure, and returning value to their shareholders (Read: Is American Airlines Making The Most Of Its Increased Cash Flows? ). But, some of these airlines have gone a step further and are investing huge amounts of money in building premium amenities and services for their elite customers. Let’s have a closer look at what these airlines are up to, and how this will impact their business in the long term. See Our Complete Analysis For Delta Air Lines Here What Are These Airlines Investing On? The US airlines have generated a remarkably high amount of cash flows over the last one year on the back of low crude oil prices. Apart from re-fleeting their aircraft, and creating a leaner balance sheet, these airlines are investing a lot of time, effort, and more importantly, money, on enhancing the flying experience for their premium customers. For instance, the three legacy carriers – American Airlines, United, and Delta are offering chauffeur driven luxury cars to their elite passengers to avoid the limelight while travelling from the Los Angeles International Airport. In addition, these airlines are developing a number of world-class amenities at their key airports. Delta, for example, is set to launch its flagship Delta Sky Club at the San Francisco International Airport (SFO) in August 2015, offering a variety of facilities such as shower suites, private work areas, Wi-Fi, etc., apart from an open-air experience with premium food, cocktails, and a runway view. The Atlanta-based airline had also expanded its presence at the John F. Kennedy International Airport (JFK) by investing more than $1.4 billion to build a state-of-the-art terminal and 11 new gates at the airport, earlier this year. Walking on Delta’s footprints, United is also generously spending money on pleasing its elite clientele. The airline is upgrading the customer experience in its United Clubs by offering a new complimentary food menu, and by undertaking extensive renovations at some of its existing Clubs. Furthermore, the legacy carrier aims to re-train its Club agents to deliver high standards of services to its members. The Chicago-based airline also plans to build new Clubs in Atlanta and San Francisco to serve more customers. American Airlines is not far behind in this race. In fact, the Fort Worth-based airline has taken this to another level by building a special pet cabin for its first-class fliers in some of its flights. The airline has also built private check-in areas for VIP passengers at airports in Los Angeles, Chicago, Miami, and New York. Earlier this year, the network carrier started offering higher points for premium fares, i.e. more expensive tickets would be entitled to higher points per mile. Consequently, the passengers can convert into a premium customer faster than usual. This is incentivizing the passengers to fly with American as opposed to its competitors and gain access to the airline’s premium services. Smaller airlines are also catching up on this trend. JetBlue entered the game with its premium Mint service offering a wide range of facilities such as comfortable fully-flat beds, on-board entertainment options, free broadband connectivity, and custom amenity kits, etc., on its transcontinental flights from New York. Are The Airlines Wasting Money Or Is It A Well-Reasoned Strategy?  Since the airlines recognize the sensitivity of their profits to crude oil prices, they are making every effort to improve the sustainability of their earnings. So, in order to maximize their profitability per seat, the airlines are investing a huge fortune into developing their premium offerings. While this may seem irrational to some investors, we see this as a far-sighted plan. Here’s why we think so: Business-class or elite travelers are less price sensitive compared to economy passengers. There are two major reasons for this – either these travelers attach more value to comfort than to money or their travel bills are paid by their employer or clients. In either case, it is a positive for the airlines. According to industry experts, the airlines make a large share of their profits from these business-class seats, while the economy seats hardly cover the fuel and labor costs. The chart below explains how the premium passengers have remained price inelastic post the economic slowdown in 2009-2010. Furthermore, the premium passengers contribute a notable share of the total number of passengers for most of the airlines. Premium passengers have accounted for more than 5.7% of the total passenger traffic on average over the last 5-6 years. Thus, if these airlines manage to capture the premium travelers’ market while improving their profitability per seat, they could witness a noteworthy rise in margins. Moreover, the investments on premium services have a trickle-down effect on all passengers. For instance, United, American, and Delta have restored free beer and wine for economy passengers on long-haul flights. Also, most of the new airplanes ordered by these airlines under their re-fleeting program include facilities such as charging outlets, wireless Internet, and better on-board entertainment options for all seats. Thus, these huge investments are likely to enhance the value for economy customers as well. This will provide sustainability to the earnings of these large carriers, which is very important, particularly in the times of oil price volatility, such as today. Finally, as long as the oil prices remain depressed, these airlines have the luxury to dig in their own pockets and spend the surplus cash flows on improving their long-term profitability. As the air travel growth continues to remain close to its 20-year average of 5%, we see these investments as a calculated risk taken by these airlines, which is likely to yield returns in the form of higher earnings in the foreseeable future. View Interactive Institutional Research (Powered by Trefis): Global Large Cap  |  U.S. Mid & Small Cap  |  European Large & Mid Cap More Trefis Research
    SPWR Logo
    How China's Woes Can Hurt Solar Companies In North America And Europe
  • By , 9/1/15
  • tags: SPWR TSL FSLR YGE
  • China has come to dominate the global solar market, producing about 70% of photovoltaic panels sold globally, driven by various government incentives and policy mechanisms.   Solar companies in the country have built up a massive 65 GW of production capacity and have emerged among the lowest-cost solar vendors in the world. However, the recent concerns over the Chinese economy have cast a shadow on the solar sector in the country, and there is speculation that the Chinese government could scale back on its renewables agenda, diverting resources into more pressing areas of the economy.  So, will the current environment provide an opportunity for western solar players such as First Solar  (NASDAQ:SPWR) and SunPower  (NASDAQ:SPWR) to bolster their share of global market, as their Chinese rivals potentially face reduced government backing? While they may benefit from their Chinese rivals being weakened to an extent, the current slowdown in China actually will likely be detrimental to them overall. Below we explain why. See Our Complete Analysis For Solar Stocks  Trina Solar |  Yingli Green Energy |  SunPower |  First Solar Diminished Subsidies May Not Help Western Players  Per the United Nations Environment Program, China invested a record $83.3 billion in renewable energy in 2014, with new solar installations coming in at roughly 12 GW.   Now, there is a real possibility that the government will curtail renewable subsidies as the economy transitions into a slower growth phase. While this would undoubtedly impact Chinese players, it may also be a negative for Western firms. In terms of specific incentives, a large chunk of China’s renewable subsides are essentially paid to stoke domestic solar demand. The feed-in-tariff mechanism, for example, pays above-market tariffs (as much as RMB 1 per kWh in 2014) for power generated from solar projects. A reduction of these demand-side subsidies is unlikely to have an impact on Western players, since it relates purely to the domestic Chinese market, to which they have little exposure. On the supply side, while Chinese manufacturers have benefited from tax breaks, cash grants and incentives at the state-level, the single-largest driver of the solar growth story in China has been the easy access to capital. State-backed banks such as the China Development Bank have offered solar manufacturers funds at low interest rates, and loans are often backstopped to a degree by the Chinese government. According to EU ProSun, a trade group, loan guarantees worth $32.5 billion were offered to the top Chinese manufacturers in 2010. This made it easy, cost effective, and less risky for solar companies to build and expand factories and fund their working capital needs. This in turn allowed  them to get a leg up over their western peers, who do not have access to similar amounts of cheap funds,  since the solar industry has generally been perceived as high-risk by the banking community in North America and Europe. It is unlikely that much will change with the current economic situation.  The debt of most Chinese players is Yuan-denominated (listed as short-term liabilities on most balance sheets) and these loans are perpetually rolled forward by state-backed lenders, and this is likely to continue. And while the scale of support to solar firms by state-backed lenders has declined in recent years, most  large manufacturers should be able to live with this. Most tier-1 manufacturers have reached profitability in recent years, reducing their dependence on cheap funds and government support. Additionally,  investors are also  warming up to solar as an asset class, and the  current low interest rate environment should allow companies to raise funds from other sources. Yuan Devaluation Helps Chinese Firms, Hurts U.S Players Chinese solar companies have generally competed with western solar firms on the basis of cost leadership rather than product differentiation; accordingly, the current environment in China actually benefits them for two primary reasons. Firstly, the Chinese Central Bank’s move to devalue the Yuan will prove beneficial to most tier-1 Chinese players such as Trina Solar and Yingli Green Energy, since they incur a substantial portion of their costs in Yuan, while more than 65% of their revenues and contracts are denominated in foreign currencies. This should make their products more competitive in export markets. Although Chinese players face trade barriers in the form of the minimum import price agreements in the European Union and anti-dumping and countervailing duties in the U.S., the currency devaluation should still provide some tailwinds, as the minimum import price is reviewed quarterly, while the U.S. duties are percentage-based. International manufacturers have been able to make some inroads into the fast-growing Chinese solar market, as project developers see greater value in the differentiated technology, higher efficiencies and better energy yields that imported panels offer. However, the devaluation of the Yuan will be a setback for western manufacturers, since their products are likely to be significantly more expensive in Yuan terms, hurting demand in an already price-sensitive market. While players such as SunPower do have manufacturing joint-ventures in place in China, they still import high-value components such as solar cells. Separately, there is also a possibility that the government could rethink its feed-in-tariff policy for projects that use imported panels, in order to encourage domestic production. Commodity Price Deflation Helps Chinese Firms  Unlike many western solar manufacturers who have used technology and panel efficiency improvements to move down the cost curve, Chinese players have traditionally leaned on their supply chains to manage costs, and the current commodity price deflation should prove positive in this regard. Trina Solar noted that the price of polysilicon and other commodities fell by roughly 10% over the second quarter. Although lower input prices will help solar companies across the board, the incremental benefit to Chinese firms should be greater, since their panel efficiencies are typically lower, implying that a greater amount of raw materials are required to manufacture every watt of solar panel capacity. For perspective, Trina Solar’s popular PC05 multi-crystalline modules offer efficiencies of roughly 15%, while many of SunPower’s panels have efficiencies upwards of 20%.  First Solar is targeting efficiencies of 16% by the end of this year. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    3 High-Yield MLPs to Buy Amid the Crude Oil Rout
  • By , 9/1/15
  • tags: TK KMI EPD
  • Submitted by Sizemore Insights as part of our contributors program 3 High-Yield MLPs to Buy Amid the Crude Oil Rout by  Charles Lewis Sizemore, CFA A few weeks ago, on one particularly rough day for the MLP sector, I wondered to myself who had just blown up. With even blue-chip names down 4% or more on the day, the only explanation I could come up with was that a leveraged MLP hedge fund must have “blown up” and been forced to liquidate its holdings due to margin calls, pushing down prices. Nothing else made sense. I never got an answer to that question, and I will probably never know. But when I see the continued meltdown in the MLP space, I’m still left wondering: What, exactly, are investors thinking when they dump MLPs at today’s prices? When they can get a 5% current yield or better and distribution growth of 5% to 10% per year for the foreseeable future . . .  where exactly do they expect to find better bargains? Hey, I get it. The collapse in the price of crude oil is scary. I wouldn’t particularly want to own an upstream exploration and production MLP like  Linn Energy  ( LINE ) in this environment. But most of the larger MLPs get most of their revenues from midstream transportation and are mostly insensitive to energy prices. And whatever modest exposure to energy prices they have right now can’t quite justify the 22% decline in the  JPMorgan Alerian MLP ETF  ( AMJ ) since early May. Today, I’m going to take a look at three midstream MLPs that have taken an unjustified beating. All pay fantastic dividends or distributions, and all are expected to see significant growth over the next several years. Enterprise Products Partners I’ll start with  Enterprise Products Partners  ( EPD ), considered by many, including myself, to be the bluest of blue-chip MLPs. Enterprise Products operates 51,000 miles of oil and gas pipelines in additional to extensive salt-dome storage capacity and marine transportation. By management estimates, about 85% of Enterprise Products’ income is fee-based, depending on the volume of oil and gas transported rather than the price. And most of EPD’s price sensitivity is due to its natural gas liquids business. Enterprise Products is down about 23% since early May on no real news. Distributable cash flow for the first half of the year was roughly flat with the same period from 2014.That might have been modestly disappointing to investors hoping for growth, but it’s hardly devastating news. At today’s prices, Enterprise Products yields 5.9%, and that distribution is about as safe as they come. Its distributable cash flow covers its current distribution by 1.3 times, giving Enterprise plenty of room to grow its distribution even if cash flows fail to grow as quickly as in years past. Kinder Morgan Up next is  Kinder Morgan  ( KMI ), the only MLP that can compete with Enterprise Products in terms of size and scope. Kinder Morgan is not technically an “MLP.” It’s a corporation. But I’m comfortable including Kinder Morgan here because, up until last year, this sprawling pipeline empire actually included three underlying MLPs in addition to the general partner. Like Enterprise, Kinder Morgan has gotten slapped around lately, down about 30% since late April. But this is absurd when you actually take the time read Kinder Morgan’s  most recent quarterly earnings release . Kinder Morgan increased its project backlog by $3.7 billion in the second quarter to $22 billion, meaning that KMI has no shortage of growth prospects in front of it. During its reorganization last year, management said that it intended to raise KMI’s dividend by at least 10% per year from 2016 to 2020, and they reiterated that call this past quarter. And at today’s prices, the stock yields a whopping 6.4%. Between the current dividend and the expected growth rate, you should be looking at minimum annual returns of about 16% per year over the next five years. That’s enough to double your money in a market that is expensive and priced to deliver almost nothing in the way of returns over the next decade. Teekay Corporation And finally, I get to one of the quirkier companies in the midstream space, Teekay Corporation  ( TK ). Most MLPs own pipelines; Teekay owns tankers. It’s a different vehicle, but it’s the same basic idea. Rather than drill for oil and gas, Teekay simply moves it around. Like Kinder Morgan, Teekay is technically a corporation and not an MLP. But this is where it gets interesting. Teekay is the general partner of two MLPs,  Teekay Offshore   Partners  ( TOO ) and  Teekay LNG Partners ( TGP ) and the controlling shareholder of another corporation,  Teekay Tankers  ( TNK ). Rather than continue as an operating entity in its own right, Teekay Corporation is transitioning into a pure-play general partner by dropping its operating assets down into its MLPs. And that can only mean one thing: A big surge in dividend growth. As part of Teekay’s strategic shift, it boosted its dividend by 70% earlier this year, and management expects annual dividend growth of 15% to 20% over the next three years. Between that stellar growth rate and Teekay’s current 7% dividend, you’re looking at doubling your money in about three years. Charles Lewis Sizemore, CFA, is chief investment officer of the investment firm Sizemore Capital Management and the author of the  Sizemore Insights  blog.  This article first appeared on Sizemore Insights as 3 High-Yield MLPs to Buy Amid the Crude Oil Rout
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    Collapse of Abenomics Threatens Global Stability
  • By , 9/1/15
  • Submitted by Wall St. Daily as part of our contributors program Collapse of Abenomics Threatens Global Stability By Martin Hutchinson, Global Markets Analyst Japan reported this week that gross domestic product (GDP) contracted by 0.4%, or 1.6% on an annualized basis, during the second quarter. Meanwhile, Japan is carrying out the most aggressive money printing program in the world right now, and its budget deficit is also the largest among the world’s rich countries. Oh, and its public debt is also the world’s highest in terms of GDP. All of which suggests that something is seriously wrong in the Land of the Rising Sun. Indeed, it’s Japan’s – and not China’s – economic policies that are most likely to collapse in ruin. When Prime Minister Shinzo Abe took office in 2012, he vowed to get the Japanese economy moving back toward the 2% annual growth rate that was thought to be its natural “speed limit.” One of his first steps was to appoint a new governor for the Bank of Japan, Haruhiko Kuroda. Kuroda instituted a bond-buying program that, relative to the country’s economy, was about three times larger than Ben Bernanke’s “quantitative easing” at its peak. Abe also promised a program of reforms, including an overhaul of the labor market. A few reforms have been implemented, and others – such as the partial privatization of the gigantic, government-owned Japan Post – are at least underway. But the real problem is the third leg of Abe’s program, a series of fiscal “stimulus” spending initiatives that have given Japan the largest budget deficit in the rich world. For 2015, The Economist’s team of forecasters projects a deficit of 6.8% of GDP. The United States, by comparison, runs a budget deficit equivalent to 2.6% of GDP. The figure is 4.4% in the United Kingdom and 2.7% in China. To reduce the deficit, Japan sought to increase its sales tax – but the first increase, from 5% to 8%, caused the economy to relapse into recession. The second hike, to 10%, has been postponed from 2015 to 2017. Approaching the Tipping Point Before 1990, Japan had a conventionally cautious fiscal policy with surpluses in some years, spending below 30% of GDP, and debt below 60% of GDP. However, during the prolonged recession of the 1990s, Japan’s Ministry of Finance was caught in the grip of Keynesian bureaucrats. Wasteful spending spiraled to around 43% of GDP, deficits soared to as much as 8% of GDP, and debt began its long rise to more than 200% of GDP. Junichiro Koizumi, Japan’s prime minister from 2001 to 2006, partially cut spending and trimmed the deficit, but the recession of 2008-09 saw both spiral out of control. The current Prime Minister, Shinzo Abe, was originally a disciple of Koizumi – but he hasn’t followed Koizumi’s policies. The result is that Japanese spending consistently exceeds the tax base, with net bond issuance currently 38% of spending and debt around 230% of GDP. If Abenomics had worked, GDP would have increased and at least slowed the increase in debt.  But Abenomics is producing neither real growth nor inflation. The current forecast from The Economist is for growth of 0.9% in 2015 and inflation of 0.7%. Both estimates – each of them probably too high – would still see the debt-to-GDP ratio increasing at a rapid clip. Now, there are two mitigating factors at work currently. First, Japanese savers hold the great majority of the debt – though this is of little help, as a government default would merely translate into national insolvency, and that’s not much of an improvement. Second, markets are liquid, confidence in Japan remains strong, and the Bank of Japan is covering the government debt with its bond purchases. Still, the debt-to-GDP ratio is nearing a tipping point. The highest ratios that have ever been brought down successfully without default were about 250%, by the United Kingdom at the end of world wars in 1815 and 1945. The first time, it was achieved through economic growth (the Industrial Revolution) and massive government austerity without inflation (the United Kingdom went back on the gold standard in 1819). The second time, it was done by suppressing interest rates and allowing inflation to erode the savings of the holders of government bonds – mostly the British middle class. If Japanese bureaucrats give up Keynesianism and embark on a massive program of government austerity, without major tax increases, the problem might still be solved. But we’re close to the point at which it will become impossible, not just (to the Japanese political class) unthinkable. At that point, confidence will erode rapidly, and a crisis will ensue. What form this crisis will take is unclear. The yen’s value would likely collapse, perhaps halving to JPY250-to-USD1, impoverishing the Japanese people and causing hyperinflation but reducing the debt burden (since almost all the debt is yen-denominated at a low fixed interest rate). If the Japanese economy has stopped growing, collapse has become not only unavoidable, but also imminent – and its effect on world markets won’t be pretty. Good investing, Martin Hutchinson The post Collapse of Abenomics Threatens Global Stability appeared first on Wall Street Daily . By Martin Hutchinson
    The ONE Thing Stopping Me Shorting Twitter
  • By , 9/1/15
  • tags: SPY TWTR
  • Submitted by Wall St. Daily as part of our contributors program The ONE Thing Stopping Me Shorting Twitter By Louis Basenese, Chief Technology Analyst When the stock market hits a rough patch (and I think the current period pretty much qualifies!) many companies’ shares get unfairly punished and offer incredible bargains. Equally, however, there are the “weak hands” – companies with sub-par fundamentals, whose share prices were being unreasonably propped up by the rising tide. Step forward, Twitter ( TWTR ). The company appears to be the perfect example. Its vulnerabilities (slowing user growth, no full-time CEO, etc.) are already taking a toll. Shares have suffered the hardest among tech giants in August, dropping as much as 22%. This is one case where shares are not priced at bargain levels due to the market’s tumble. There’s plenty more downside potential yet. In fact, if Twitter shares get dumped like those of former social media darling Yelp ( YELP ), the stock could tumble another 60% based on Yelp’s current price-to-sales ratio. Here’s why I believe such an epic crash and burn is possible for Twitter – but with one important caveat . . . Five Key Reasons to Short Twitter I’ve never been a Twitter buyer because of its inflated valuation and rapidly decelerating user growth rates. Indeed, for over a year now I’ve warned about Twitter’s questionable fundamentals . Metrics that only deteriorated more noticeably with time. In fact, the list of unenviable fundamentals keeps getting longer. Topping that list are  . . . Anemic Growth: In the most recent quarter, core monthly active users (MAUs) checked in at 304 million, up a mere two million from the previous quarter. Twitter execs, of course, tried to soften the blow by inflating MAUs using the stat that there were 12 million “SMS Fast Followers.” Nice try! Basic math reveals the underlying growth problem. Worse still, it’s not a problem that can be easily or quickly corrected, as interim CEO Jack Dorsey himself concedes: “We do not expect to see sustained meaningful growth [in MAUs] until we start to reach the mass market. We expect that will take a considerable period of time.” Forget “considerable,” it could take forever. Why? See No. 2 . . . Questionable Utility for the Masses: Former Twitter CEO, Dick Costolo, repeatedly stated that it was his goal to reach “everyone on the planet.” At this point, that’s a pipe dream. As I shared on CNBC last year, “Mom, dad, even grandma understand Facebook ( FB ). But they don’t have a clue what Twitter’s for.” The proof is in the numbers. There are now more than one billion inactive accounts on Twitter. “We haven’t communicated why people should use Twitter, nor made it easy for them to understand how to use Twitter,” contends Dorsey. Um  . . .  not quite, Jack! Over one billion have tried it . . .   and didn’t like it enough to continue! At the end of the day, Twitter is immensely useful to people in the media and financial world, but not so much to everyone else. And since social media stocks are all about the network – the bigger, the better, as it means there’s more potential to generate revenue – being relegated to a niche product is a long-term problem for Twitter and, by association, its shareholders. Accounting Shenanigans: I already mentioned the sudden inclusion of SMS users to beef up this quarter’s numbers. But Twitter has tried the switcheroo so many times with its key metrics (remember timeline views?) that even the SEC is taking notice now. A letter in April reveals the regulator questioned the practice of using “alternative metrics” to explain user engagement. The SEC also peppered the company about its increasing foreign losses and the different streams of revenue from advertising types. The SEC is hyper-sensitive to reporting now, having notoriously missed previous accounting shenanigans. (Remember Enron?) The fact that it’s catching on to potentially misleading practices means the attempts to fluff the figures are particularly egregious. The only thing worse than slowing growth is executives repeatedly trying to hide it. A Leadership Void: It’s been nearly three months since Costolo’s abrupt departure. Interim CEO Dorsey isn’t fit to serve, either. Not while he’s also running mobile payment company Square, Inc. as it prepares for an IPO. As for Revenue Chief Adam Bain, who’s been mentioned as an internal CEO candidate, he’s not even sure if he wants to run the company, according to sources. Such a leadership vacuum takes a toll. As one current employee recently told Business Insider, “Morale is beyond low. So many people who I’d have never guessed now want to leave.” The longer Twitter remains leaderless, the worse the impact on the underlying business. Technical Breakdown: Employees aren’t the only ones discouraged. So are early investors. Recent trading took shares of Twitter below its November 2013 IPO price of $26. That’s a key technical level. With this level now broken, the stage is set for shares to fall much further still. So what’s keeping me from shorting the stock? It’s simple, really . . . The Vultures Are Circling The lower Twitter shares go, the higher the chance the company gets acquired. And being short a stock if an announcement like this hits makes it difficult, if not impossible, to exit the position profitably. And the likelihood of a takeover is high. In fact, investment banker Victor Basta believes a Twitter buyout is inevitable. I agree. Another tech giant could certainly find a way to monetize Twitter’s user base more effectively. Who are the candidates? The usual suspects . . . Google ( GOOGL ) makes the most sense, as it has an enormous amount of cash ($68 billion) and a hole in its portfolio for a true social media product after the failure of Google+. But Twitter’s fellow social media giant, Facebook, has also been rumored as a potential buyer – a development that would see Zuckerberg & Co. wipe out their main competition in a stroke. Apple ( AAPL ), Microsoft ( MSFT ), and even Amazon ( AMZN ) are also possible acquirers. Needless to say, it all boils down to price. The magic number where Twitter becomes an irresistible acquisition target is unknowable. At $30 per share – equal to a market cap of about $20 billion – an acquisition would be too pricey. As a frame of reference, Facebook paid $22 billion for WhatsApp when it was in the early innings of its growth spurt. It’s since doubled in size to more than 800 million MAUs. So it’s hard to imagine a suitor paying that much for Twitter’s smaller and slower-growing user base. But what if Twitter falls to $15 per share – about a $10-billion market cap? In this case, things get much more tempting for suitors. And Twitter’s fundamentals could certainly lead shares down to those levels. Here’s the rub: It’s impossible to know exactly when a takeover offer would materialize. But the lower the stock goes, the greater the chances of a buyout. So while the carrot of a Yelp-like 60% profit from a Twitter collapse is compelling, an all-out short sale simply isn’t worth the risk. Ahead of the tape, Louis Basenese The post The ONE Thing Stopping Me Shorting Twitter appeared first on Wall Street Daily . By Louis Basenese
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    The Month That Was: Automotive Stocks
  • By , 8/31/15
  • tags: DAI TTM-BY-COMPANY VOLKSWAGEN-AG TTM VLKAY DDAIF GM TM F
  • It has been an eventful August. Earlier in the month, China devalued the renminbi against the U.S. dollar, the biggest one-day currency move in over two decades, in a bid to spark an increase in exports and boost economic growth. And then the country cut interest rates, flooding its banking system with liquidity. Concerns over the contagion effect of the China slowdown on the rest of the world, signs that the U.S. economy might not be doing as well as previously thought, and uncertainty over interest rate hikes, saw the Dow Index plummet 1,900 points, and the S&P 500 Index decline more than 10%, before the six-day losing streak ended last week. The stock market has rallied since, but uncertainties still remain. The Chinese slowdown has impacted many companies, especially the likes of  Volkswagen AG (OTCMKTS:VLKAY),  Daimler AG, and  Tata Motors (NYSE:TTM), who previously looked at the huge potential of China to derive growth. The world’s largest automotive market has suffered a substantial hit this year, with sales of passenger vehicles declining in both June and July by 3.4% and 6.6%, respectively. Overall, automobile sales are up only 0.4% year-over-year through the first seven months. And volumes are braced to decline again in August. Amid the normalization of the Chinese automotive market, we look at how these companies are placed. Volkswagen China forms over one-third the net vehicle deliveries for the entire group, a group that delivers over 10 million vehicles annually across the globe. Hurt by the slowdown, Volkswagen’s vehicle deliveries declined by 5.3% year-over-year through July in the country, more than the 0.4% decline in overall automobile sales. The company is not only losing volume sales due to the lowering demand, but is also surrendering market share to both foreign and domestic manufacturers. We have a  $46 price estimate for Volkswagen AG, which is above the current market price. The stock has declined 6% in the last month. See Our Complete Analysis For Volkswagen AG   The price sensitivity of consumers has increased amid the slowdown and crashing of the stock markets, and the domestic makers have considerably lower price-points when compared with the foreign automakers who import their vehicles, which has benefited them. A tough pricing environment in China, and slight reduction in disposable incomes, has impacted the financials of key foreign automakers, which have lost approximately 3.7 percentage points of market share to domestic manufacturers so far this year in the country. On the other hand, the luxury juggernaut owned by Volkswagen, Audi, has also struggled in China this year, with sales declining 0.3% year-over-year through the first seven months of the year. More of the same could continue this month. Daimler A stark contrast to Audi’s downtrend in China has been Mercedes’ growth. Mercedes-Benz has defied the China slowdown and posted a 14.7% year-over-year rise in global vehicle deliveries through July, with a solid 22.7% rise in deliveries in China. The brand expects this trend to continue through the rest of the year, and might not look to increase discounts despite the increased economic volatility. This could protect profitability. In addition, while Mercedes had for around two years trailed its compatriots in terms of operating margins, as of Q2, it has the highest margins among the German big three. Compared to BMW and Audi’s 8.4% and 9.7% operating margins, respectively (the figure for Audi doesn’t include China results), Mercedes’ margins stood at 10.5%. We have a  $91 price estimate for Daimler AG, which is above the current market price. The stock has declined 8.3% in the last month. See Our Complete Analysis For Daimler AG   Why the August results might be pivotal for Mercedes is because the brand could very well overtake Audi as the second highest-selling luxury automaker in the world, behind BMW, this year. Mercedes trails Audi by less than 300 units and has the growth momentum. Tata Motors The contribution of China to Jaguar Land Rover’s (JLR) net retail sales has decreased from 28% in Q1 fiscal 2015 to 18% this Q1 quarter (ended June), due to a large 33% fall in retail volume sales in the country. The impact of the fall in China demand is also apparent in Tata Motors’ financials. Net revenues fell 6% and profit after tax was almost half of what it was in the last June quarter, hurt by the decline in China sales at JLR, which forms almost 90% of the group’s valuation as per our estimates. Trefis’ price estimate for Tata Motors is $37, which is above the current market price. The stock has declined a considerable 13% in the last month. See Our Complete Analysis For Tata Motors Volumes continue to be down in July, and could decline again in August. The case with JLR might be bad timing due to the problems in ramping up sales of the Evoque, which is rolling out from a completely new manufacturing facility in China, the first time JLR is building vehicles from scratch outside the U.K. It might take time for the company to speed up production. In order to boost its retail sales, the brand cut the starting price of its China-produced Evoque, is also launching the new Jaguar XF and XJ models this year, and running out the Freelander, which will be replaced by the Discovery Sport. Once the reach and availability of the new locally-built models increase in the country, the company’s sales might begin to turn around, seeing how demand for premium SUVs and Crossovers remains strong. More color would be provided by the August volumes. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
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    Monthly Notes On The Coffee Industry: Starbucks & Dunkin' Brands
  • By , 8/31/15
  • tags: DNKN
  • On account of last week’s news of the Chinese slowdown, many commodities took a plunge in the market, as many risk-averse investors pulled out from a majority of the stocks and some of the commodities. With fear that the slowing Chinese economy could drag the world towards a new recession, the Bloomberg Commodity Index dropped to further lows. The September 2015 futures for coffee touched 117 cents/lb further lowered by the strong dollar. On the other hand, Arabica prices for the December contract dropped to 124 cents/lb. Here are some updates related to coffee companies covered by Trefis: Starbucks In the latest quarter earnings (June-ended), Starbucks reported a massive 18% year-over-year (y-o-y) increase in revenues to $4.9 billion, driven by 7% growth in comparable store sales. Mobile payments, the introduction of ultra-premium coffee through its Reserve stores, and an increase in customer traffic with improved average spend, are some of the reasons for Starbucks’ knockout performance in the quarter. The introduction of premium and ultra-premium reserve coffee positively drove the average transaction by 4% y-o-y, resulting in a 120 basis points improvement in operating margins. The highlight of the earnings was the rapid growth of the company’s mobile payment and ordering initiative, which is now available in 4,000 of Starbucks’ U.S. company-operated stores. Starbucks has roughly 10.4 million active My Starbucks Reward members, up 28% y-o-y, with 6.2 million Gold members, up 32% y-o-y. This resulted in an increase in average transactions during the quarter. SBUX stock traded between $56 and $59 for the major part of August before falling to $50 on news of the Chinese slowdown. Our price estimate for SBUX is $55, which is roughly the same as the current market price. Dunkin’ Brands Dunkin’ Brands reported strong comparable store sales growth in the domestic market in the second quarter but witnessed a dull performance by its international segments.  Dunkin’ Brands’ net consolidated revenue for the quarter rose more than 10% year-over-year (y-o-y) to $211 million, with diluted EPS of $0.44. The company mentioned that its business in South Korea, which accounts for a major portion of sales for both brands internationally, was affected due to the outbreak of the MERS virus and are expecting some lingering impact in the third quarter as well. DNKN stock gradually dropped from $55 to $50 during the first three weeks of August before rising back up to $51.70. Our price estimate for DNKN stock is $57, which is roughly 4% above the current market price. View Interactive Institutional Research (Powered by Trefis): Global Large Cap  |  U.S. Mid & Small Cap  |  European Large & Mid Cap More Trefis Research
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    Can The New GPU Lineup Help AMD Regain Its Share In Discrete GPUs?
  • By , 8/31/15
  • tags: AMD INTC NVDA QCOM
  • AMD’s  (NYSE:AMD) stock has lost approximately 40% of its value in the last six months as the company has seen a steep decline in its top line in the last few quarters. In addition to being the worst hit by the sluggish PC demand this year, AMD has suffered market share losses to  Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA). AMD has undertaken a number of restructuring initiatives in the last two years, but its efforts have so far failed to provide a continuous growth momentum to its top line. In 2014, the company saw marginal growth in its revenue as it successfully ramped up a diverse set of new products in non-PC growth markets, primarily the gaming industry. AMD believes that Q2 2015 will be a revenue trough for the year.  Management looks forward to seeing improvements in the back half of the year as the company ramps semi-custom wins and its newest APU and GPU products. Last week, AMD launched its third “Fiji”-based product this summer (Radeon R9 Nano), the first two being AMD Radeon R9 Fury and R9 Fury X graphics cards. Radeon R9 Nano is the fastest Mini ITX graphics card ever to enable 4K gaming in the living room through ultra-quiet, ultra-compact PC designs. The Fury graphics family marks a turning point in PC gaming with the implementation of High-Bandwidth Memory (HBM) to deliver extreme energy efficiency and performance for ultra-high resolutions, unparalleled VR i.e., Virtual Reality) experiences, and smoother gameplay. Offering a number of variants ranging from $199 – $649, the Radeon R9 Series claims to meet virtually every need and budget for anyone who demands a premium gaming experience. Whether AMD’s new Radeon GPU lineup can help the company regain its lost market share from Nvidia, only time will tell. Our price estimate of $2.43 for AMD is at a 30% premium to the current market price. See our complete analysis for AMD The PC Gaming Graphics War Between NVIDIA and AMD In March 2013, AMD devised a unified gaming strategy to drive the gaming market across consoles, cloud platforms, tablets and PCs. The strategy has clearly paid off well so far, as the company now powers all major next generation consoles including Sony’s PlayStation 4, Nintendo’s Wii U and Microsoft’s Xbox One. However, when it comes to discrete graphics cards, Nvidia still has an upper hand over AMD, as far as the current market share is concerned. PC gaming account for a large chunk of the worldwide gaming market, higher than consoles, phones, tablets or any other individual gaming segment. The PC gaming market is expected to grow from $26 billion in 2014 to $35 billion by 2018. Following AMD’s acquisition of ATI in 2006, AMD has been one of two key players in the discrete graphics cards market, along with Nvidia. The two companies account for almost 100% of the GPU market. The market shares of the two companies have fluctuated a lot between quarters, but Nvidia still manages to retain its lead over AMD in the discrete GPU market. Nvidia has pursued architecture updates aggressively and more quickly placed them in products while AMD, strapped for resources as it tries to compete with Intel in CPUs and Nvidia in GPUs, has fallen back on re-branding existing chips in many of its cards. In the past, AMD has often resorted to slashing its prices in order to better sell its graphics chips. During its financial analyst meeting in May, AMD highlighted that its larger gaming efforts include not only consoles, but everything from casinos to PCs.  And it will leverage GPUs, CPUs, software, as well as its semi-custom chips. Plans for AMD’s Graphics Core Next architecture include high-performance capabilities with twice the power efficiency of current GPUs and a FinFET 3D transistor architecture. AMD has launched a number of new products (CPUs, APUs and GPUs) with added features and improved efficiency so far this year. There are indications that AMD might enjoy an upswing in popularity as DirectX 12 games start to emerge. The only DX12 game benchmarked so far seems to show that AMD’s R9 390X offers performance at par with the Nvidia GTX 980, but for significanty less. We forecast a marginal increase in AMD’s discrete GPU market share (both notebooks and desktops) in the long-run. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
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