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Trefis Analysis

COMPANY OF THE DAY : NETFLIX

Netflix recently raised subscription prices in Europe, citing the need to continue providing attractive original content. We expect that Netflix will continue raising rates as it has significant pricing power. In a recent note we explain this view in more detail.

See Complete Analysis for Netflix
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FORECAST OF THE DAY : JUNIPER'S EDGE ROUTER MARKET SHARE

Juniper's edge router market share has been declining of late, primarily driven by competition from Cisco and Alcatel Lucent. Going forward, we expect the downward pressure on Juniper's edge router market share to continue, albeit at a more moderate rate.

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UnitedHealth Group Logo
  • commented 8/27/15
  • tags: UNH
  • Automated Breast Ultrasound System (ABUS) Market to Grow at a CAGR of 8.1% between 2015 and 2025

    Future Market Insights (FMI) delivers key insights on the global ABUS market in its upcoming outlook titled, "Automated Breast Ultrasound System (ABUS) Market: Global Industry Analysis and Opportunity Assessment, 2015 - 2025". In terms of value, the global ABUS market is projected to register a healthy CAGR of 8.1% during the forecast period due to various factors, regarding which, FMI offers vital insights in detail. The global ABUS market is projected to register a CAGR of 8.5% in terms of volume during the forecast period.

    On the basis of end user, the market has been segmented into hospitals and diagnostic imaging laboratories. The hospitals segment is estimated to account for 54.2% share in the global ABUS market by 2015 end, and is expected to register healthy CAGR of 8.2% in terms of value over the forecast period. In addition, in terms of volume, the segment is expected to record a CAGR of 8.7% during the forecast period. In terms of revenue, the hospitals segment is currently witnessing major contribution from Asia Pacific, North America and parts of Western Europe. Moreover, research and development on ABUS is likely to further fuel market growth during the forecast period. The diagnostic imaging laboratories segment is expected to record a CAGR of 8.1% and 8.5% in terms of value and volume respectively during the forecast period.

    Growth of the global ABUS market is mainly driven by increasing prevalence of breast cancer, growing radiology market, government advocation for breast cancer awareness and extensive research and development for enhanced imaging techniques. Other trends driving market growth include strategic alliances among key players in the market, manufacturers eyeing mammography market share and expansion of healthcare sector in developing countries due to growing investments by major players. In addition, surge in demand for advanced medical devices owing to increasing health awareness and growing disposable income is cumulatively anticipated to result in increased spending on enhanced medical services. This in turn, is anticipated to bolster ABUS market growth during the forecast period (2015–2025).

    Browse Full: "Automated Breast Ultrasound System (ABUS) Market: Global Industry Analysis and Opportunity Assessment, 2015 - 2025" Market Research Report at http://www.futuremarketinsights.com/reports/automated-breast-ultrasound-system-market

    This report covers trends driving each segment and offers analysis and insights into potential of the ABUS market in specific regions. North America is estimated to dominate the ABUS market with 42.0% market share by 2015 end, and is anticipated to remain dominant by 2025. North America and Western Europe collectively are expected to account for over 74% in the total ABUS market share in terms of value by 2015 end.
    Among all the regions, Japan is anticipated to register the highest CAGR in terms of value and volume respectively between 2015 and 2025, followed by North America due to increasing installations of ABUS owing to breast cancer prevalence and consumer concerns for early detection of breast cancer in these regions. Mammography X-ray is preferred as a gold standard technique for breast cancer detection among consumers especially in Asian countries. This lowers adoption of automated techniques used for detecting breast cancer and hence, offers opportunities for multiple modalities primarily for automated breast ultrasound system supported by regulatory approval for the same and offering additional diagnostic confidence to the patient as well as the radiologist.

    Key players in the global ABUS market such as General Electric Co., Siemens A.G., Hitachi Ltd. and SonoCiné Inc. focus on making substantial investments in research and development activities to enhance product portfolio to offer competitive advantage and in turn, create high entry barriers for players entering ABUS market.

    For more insights on Global Automated Breast Ultrasound System (ABUS) Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-606
    [ less... ]
    Automated Breast Ultrasound System (ABUS) Market to Grow at a CAGR of 8.1% between 2015 and 2025 Future Market Insights (FMI) delivers key insights on the global ABUS market in its upcoming outlook titled, "Automated Breast Ultrasound System (ABUS) Market: Global Industry Analysis and Opportunity Assessment, 2015 - 2025". In terms of value, the global ABUS market is projected to register a healthy CAGR of 8.1% during the forecast period due to various factors, regarding which, FMI offers vital insights in detail. The global ABUS market is projected to register a CAGR of 8.5% in terms of volume during the forecast period. On the basis of end user, the market has been segmented into hospitals and diagnostic imaging laboratories. The hospitals segment is estimated to account for 54.2% share in the global ABUS market by 2015 end, and is expected to register healthy CAGR of 8.2% in terms of value over the forecast period. In addition, in terms of volume, the segment is expected to record a CAGR of 8.7% during the forecast period. In terms of revenue, the hospitals segment is currently witnessing major contribution from Asia Pacific, North America and parts of Western Europe. Moreover, research and development on ABUS is likely to further fuel market growth during the forecast period. The diagnostic imaging laboratories segment is expected to record a CAGR of 8.1% and 8.5% in terms of value and volume respectively during the forecast period. Growth of the global ABUS market is mainly driven by increasing prevalence of breast cancer, growing radiology market, government advocation for breast cancer awareness and extensive research and development for enhanced imaging techniques. Other trends driving market growth include strategic alliances among key players in the market, manufacturers eyeing mammography market share and expansion of healthcare sector in developing countries due to growing investments by major players. In addition, surge in demand for advanced medical devices owing to increasing health awareness and growing disposable income is cumulatively anticipated to result in increased spending on enhanced medical services. This in turn, is anticipated to bolster ABUS market growth during the forecast period (2015–2025). Browse Full: "Automated Breast Ultrasound System (ABUS) Market: Global Industry Analysis and Opportunity Assessment, 2015 - 2025" Market Research Report at http://www.futuremarketinsights.com/reports/automated-breast-ultrasound-system-market This report covers trends driving each segment and offers analysis and insights into potential of the ABUS market in specific regions. North America is estimated to dominate the ABUS market with 42.0% market share by 2015 end, and is anticipated to remain dominant by 2025. North America and Western Europe collectively are expected to account for over 74% in the total ABUS market share in terms of value by 2015 end. Among all the regions, Japan is anticipated to register the highest CAGR in terms of value and volume respectively between 2015 and 2025, followed by North America due to increasing installations of ABUS owing to breast cancer prevalence and consumer concerns for early detection of breast cancer in these regions. Mammography X-ray is preferred as a gold standard technique for breast cancer detection among consumers especially in Asian countries. This lowers adoption of automated techniques used for detecting breast cancer and hence, offers opportunities for multiple modalities primarily for automated breast ultrasound system supported by regulatory approval for the same and offering additional diagnostic confidence to the patient as well as the radiologist. Key players in the global ABUS market such as General Electric Co., Siemens A.G., Hitachi Ltd. and SonoCiné Inc. focus on making substantial investments in research and development activities to enhance product portfolio to offer competitive advantage and in turn, create high entry barriers for players entering ABUS market. For more insights on Global Automated Breast Ultrasound System (ABUS) Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-606
    LEA Logo
    Lower Automotive Sales Growth Could Hurt Lear Corporation
  • By , 8/27/15
  • tags: LEAR LEA JCI GM F VLKAY TTM
  • Lear Corporation  (NYSE:LEA), which supplies automotive seating and electrical interiors to some of the leading automakers in the world, is likely to feel the impact of a softer progression of the global economy. Lear’s business effectively depends on global demand for vehicles, and with slowing economic conditions in China — the world’s largest automotive market, continual emerging market volatility, and slower than expected growth in the U.S., growth in global automotive volumes is expected to slow down this year. We estimate a $108 price for Lear Corporation, which is above the current market price. See our full analysis for Lear Corporation Lear has consistently outpaced growth in the global vehicle production levels, but the growth rate for Lear has slowed down. Weaker global economic conditions and softer vehicle demand could reduce Lear’s future business volumes. In addition, what’s been the biggest downer for the company this year is the appreciation of the U.S. dollar against certain crucial currencies. Net sales were up only 1% year-over-year in Q2, with unfavorable foreign exchange dragging down the top line by 9 percentage points. With the devaluation of the Chinese Renminbi, Lear’s revenues from China are also set to take a hit. Apart from unfavorable currency translations, Lear could be impacted by slowing vehicle sales around the world. China, which contributed 12% to the company’s net sales in 2014, is going through a slowdown. Weaker economic conditions, affected by the fall in the stock market, industry overcapacity, and negative customer sentiment, have hurt automotive demand, so much so that passenger vehicle sales fell in each of the last two months in China on a year-over-year basis. July sales were down 6.6%. The advantage that Lear has over individual automakers is that it caters to a number of clients. GM, Ford, and BMW together formed 54% of the company’s net sales last year. In addition, the company also supplies automotive interiors to Daimler AG, Fiat Chrysler Automobiles, Hyundai Motor Company, Jaguar Land Rover, Peugeot S.A., Renault-Nissan Alliance, and the Volkswagen Group. And in China, a considerable 40% of its seating business is with major domestic automakers. So, one could think that even if one automaker, or if foreign automakers aren’t faring well in the country, Lear could make up sales from another automaker, due to the growth in business at some other automaker. And considering that Lear has a strong brand recognition and ranks among the top seating and electrical automotive interior businesses, its strong relationships with automakers could mean that despite a declining market size, it could achieve growth by growing market share. But if growth stagnates for most of the automakers, Lear will feel the heat, too. The other downer for Lear could be the fall in average content per vehicle. Growing sales of premium and larger vehicles, which require more seating and electrical content, have been fueling growth in average content per vehicle in the past. However, with substantial erosion of disposable incomes in China, the precipitous fall in the stock market, and devaluation of the Renminbi, the increased price sensitivity of consumers has resulted in higher sales of budget vehicles. This segment shift could impact Lear, lowering the average content revenue per vehicle, which essentially means that even if vehicle volume sales maintain growth, lower average content per vehicle will dent Lear’s top line growth. The situation becomes worse when we take into consideration the expected fall in volume sales growth this year. Following a 3.6% year-over-year rise in 2014, global car sales growth is forecast to grow by a slower 2.5% this year. There is much speculation about the contagion impact of China’s devaluation of the Renminbi and following interest rate cut on the rest of the world, including the U.S. With slower-than-expected growth in the U.S., inflation not high enough to justify an increase in interest rates, and the recent decline in the stock market, the Federal Reserve might now look to delay the anticipated increase in interest rates. Softer global economic conditions will also trigger a slowdown in automotive sales. But, on the other hand, one might think that with oil prices remaining historically low, disposable incomes might get a boost. The job market continues to do well and the housing sector has also seen growth this year. So, could this downturn be just near term? That is one question that we will have to wait to find out the answer. Automotive sales growth is expected to slow down this year, hurt by the slowdown in China, and some other crucial emerging markets such as Brazil and Russia. This is, in turn, expected to dent Lear’s business. See the links below for more information and analysis: Lear’s Q2 results review: profits grow despite currency pressures Large demand for SUVs bodes well for Lear’s seating business Lear’s strong growth momentum continues into Q1 Trefis analysis: Lear Corporation Seating Revenues Trefis analysis: Lear Corporation EPMS Revenues View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research    
    GES Logo
    Guess Resolves To Make A Turnaround With The Help Of Its Newly Appointed CEO
  • By , 8/27/15
  • tags: GES GPS LB URBN ANF
  • Guess   (NYSE:GES) released its second quarter fiscal 2016 results on August 26th. The highlight of the earnings call was the appointment of Victor Herrero as the Chief Executive Officer of Guess Worldwide in July 2015. This is the first time in the company’s history that someone outside the Marciano family will be assuming the position. The criteria for selecting Mr. Herrero was his success in Inditex, a Spanish multinational clothing company, where he built a $4 billion business in Asia after starting from scratch. The 35-year-old Guess brand, with a presence in over 90 countries, is in dire need of major strategic changes. The specialty apparel retailer has been struggling with its performance, lately. Like other players in the retail industry, macroeconomic challenges in its major regions of its operations had hit Guess’s sales. Currency headwinds from its international regions and declining store traffic in North America are two significant challenges that had been crippling Guess’s growth in recent times. The appointment of a new CEO can be seen as a remedial measure for the company in an effort to make a turnaround in its performance. According to Guess’s management, Victor Herrero had been one of the instrumental personnel behind the disruptions observed in the fast fashion industry, hence it believes Victor Herrero might have what it takes to revive the ailing retailer. Guess’s revenues for the quarter stood at $546 million depicting a 10% year-on-year decline (1% decline in constant currency terms). The company’s net earnings for the quarter stood at $18.3 million reflecting around a 17% year-on-year decline. The company’s diluted earnings per share decreased by 19.2%, or 5 cents, to $0.21, with currency headwinds accounting for an erosion of around $0.10. We’ll revise our $25 price estimate for Guess, shortly. See our complete analysis for Guess Victor Herrero’s 5-Pronged Strategy To Revive Guess  The Sales And Merchandising Strategy The sales force should have a thorough knowledge of the products sold and how those are unique from their competitors. The managers are expected to transform into product experts with an exhaustive knowledge of latest trends, product composition, and the most crucial selling items. The goal of this strategy is to feel the consumer’s pulse and understand what he or she truly desires. Instead of a push- based strategy of supplying whatever the company currently produces, Guess will henceforth rely more on a pull or demand based strategy by aiming to provide what the customer really wants. Digital Marketing Strategy The brand will be portrayed as a unique lifestyle concept and the average age of its target audience will be lowered. Digital marketing and social media will play an important role in spreading the new brand  image and in connecting with the millennials via fashion bloggers, social media, etc. The company is on the lookout for a digital marketing officer to conceptualize these visions. Store Strategy After reviewing the store structures, Guess will invest in the commercially important stores to project the company’s new brand image. The stores will be categorized into three segments based on their level of performance and then a roadmap for improvement will be strategized for each category. There will also be a rigorous check kept on the level of stocks so as to gauge the performance in a  more quantitative manner and also to effectively replenish stocks whenever required. Yearly Retail Calendar Guess will maintain a yearly retail calendar for all its stores so that it can capture all the selling opportunities such as mall events, promotions, holidays, in a more effective manner. Increase Stock Keeping Units (SKUs) In Stores The increased number of SKUs will give an idea about what’s working and what isn’t and hence, help in building a better collection of products, with a focus on the newer and faster-growing categories.  The Top Initiatives That Guess Plans To Undertake Phase I The product pricing will be periodically reviewed and revised according to the market sentiments. The company plans on achieving a better synchronization between the market environment and its pricing strategies in this manner. The company will increase its focus on Asia. Since Victor had been highly successful with the Inditex Asia business, he aims to replicate the success with Guess. Currently, Guess’s Asia business contributes around $250 million in revenues accounting for over 10% of the company’s revenues. Victor plans to increase the revenue contribution to around $750 million (or around 25% of the company’s total revenues). Guess started losing its stronghold in Asia since 2013 prior to which it experienced impressive growth in the region. The company is still grappling to recover its former position in Asia. Currently, the economic slowdown in China and Korea, along with the currency headwinds, have been Guess’s major roadblocks in Asia. The company will transition towards a flat and centralized structure, where corporate decisions such as logistics, finance, communications, and stock allocations, will be centralized in its headquarters. This will help enhance the firm-wide synergy between various operations. Phase II In the second phase of the growth initiatives, the company will focus on streamlining costs and enhancing the wholesale business. Guess’s Regionwise Performance In The Second Quarter Americas Though Guess’s revenues in the Americas (erstwhile this division was known as North America, the name was changed to emphasize the growing representation of South and Central American countries in Guess’s business) Retail segment declined by 2% in constant currency on a year-over-year basis, however, there was a sequential improvement in both store traffic and comparative store sales, versus Q1 2016. The company’s sales through the e-commerce channel improved by 20% year-on-year. From a brand perspective, the Marciano product line displayed double-digit growth and there was also a sequential improvement in the Guess brand of product sales. With respect to store closures, the company had revised its estimates based on improving trends in the second quarter and expects to close roughly 40 stores for the full year (as against its earlier estimate of 60 store closures). Europe The revenues in Europe experienced a 4% year-on-year constant currency growth. The quarter was positively impacted by $15 million worth of earlier than expected shipments. The sales growth was impressive in Italy, Iberia, and Germany. Guess, like other retailers, is facing problems in Europe due to weak macroeconomic conditions. To exacerbate the situation, Guess’s presence is concentrated towards Southern Europe (Spain, Italy, France, and Greece) which had been the worst affected by the recession. Asia The Q2 revenues in Asia declined by 6% in constant currency terms. The performance in China had significantly improved with double-digit growth in comparative store sales. However, this was more than offset by the slowdown in Hong Kong, Macau ( decline in tourist traffic), and Korea (post the MERS crisis). Guidance For Full Fiscal 2016 Net revenues: 0.5% to 1.5% decline in constant currency and an additional 7.5% decline due to currency headwinds Operating Margin: 5% to 6% (including currency headwinds of 130 basis points) Diluted EPS: $0.89 to $1.02 (with a currency headwind impact of around $0.40) View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap |  More Trefis Research
    DIS Logo
    Disney's To Push Star Wars Merchandise, So As To Drive Double Digit Segment Growth Near Term
  • By , 8/27/15
  • tags: DIS TWX CMCSA FOX
  • Disney’s  (NYSE:DIS) plans to aggressively push Star Wars merchandise points towards potential success. The media giant saw massive benefits from Frozen merchandise last year, which led to a double digit growth in the segment revenues. However, the dynamic with Star Wars will differ, despite its massive fan following . The reason is the target demographics. Frozen connected well with kids, but Star Wars is not that popular with the youngest generation who predate its blockbuster movies. Remember, the first movie in this series was released more than three decades ago. Disney realizes this issue and it is thus going to be aggressive in marketing   Star Wars  merchandise and using different platforms, such as YouTube (Maker Studios) and ABC, to promote new toys. This is important for Disney as the   merchandise will not only aid the consumer products revenue growth but also create more visibility and hype for the movie, which will release in December. We currently  estimate consumer products revenues of around $4.75 billion in 2015, also reflecting the contribution from the newly opened Shanghai store. In the coming years, we estimate revenues to be north of $7 billion, primarily reflecting the benefits of international expansion, Star Wars and Frozen 2, among other factors. The  EBITDA margins associated with consumer products business  are also higher at around 45%, according to our estimates. This will translate into EBITDA of $3.4 billion by the end of our forecast period, representing 12% of the company-wide EBITDA. Understand How a Company’s Products Impact its Stock Price at Trefis Expect Solid Growth In Consumer Products Revenues In The Near Term Disney acquired Maker Studios last year for $500 million and now it is putting it to use with various creators lined up to promote the new Star Wars merchandise. This, among other benefits, is why Disney acquired Maker at first place – to cross-market its various products and services. While the event on YouTube will reveal different products on September 3rd, more than 1,000 stores will open the next midnight to sell the Star Wars products. If Disney succeeds in its attempts to create massive demand with the younger generation, it will be a significant achievement for the company. Firstly, it will create more hype and demand for the movie, which is scheduled to release around Christmas.  Secondly, it will go well with its plans for a new Star Wars attraction in its theme parks.   Thirdly, it will significantly boost the consumer products segment revenues.  Fianlly, we note it establishes a platform to be leveraged by subsequent movies lined up in this series. The consumer products division is anyways trending well for Disney. Revenues have almost doubled in last five years to $4.25 billion in 2014, partly reflecting the benefits of Marvel acquisition. The segment saw a solid growth last year with the success of Frozen merchandise. The stores were unable to meet the demand for  Frozen  merchandise and even restricted customers to buying a maximum of two items per order for some time. Stores across the U.S. were sold out on  Frozen  costumes for most of the first half last year. Frozen connected well with younger generation and that’s what Disney is now trying to do with Star Wars (also see – Disney Lowers FY 16 Guidance, Though Star Wars And Shanghai Are Key Factors To Driving Future Growth ). Apart from Star Wars, the segment will see revenue growth from its Playmation series in the near term. Playmation is a line of toys that combines wearable gadgets with role-play of various characters and it will hit the retail stores in October this year. Added to the benefits of Star Wars merchandise, Disney should be able to grow its consumer products revenues in 2015, despite a slower first half. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    WAG Logo
    Walgreens Steps Up Retail Clinic Expansion As Demand For Convenient Care Grows
  • By , 8/27/15
  • tags: WAG
  • As selling medicines become less profitable, pharmacies have been looking for new avenues for growth. Most of the top pharmacy chains in the U.S. are, therefore, increasing focus on selling beauty products and also remodeling stores in the process. Drug retailers have found another source of growth in retail health clinics, which have been proliferating across the U.S. for the last few years.  Walgreens (NASDAQ:WBA) currently has 400 healthcare clinics spread throughout the country. CVS Health (NYSE:CVS), on the other hand, is far ahead in the race with about 1,000 clinics and plans to further expand to 1,500 clinics by 2017. In an attempt to narrow this gap down, Walgreens recently announced a collaboration with Providence Health and Services through which new clinics will open at Walgreens stores, but will be owned and operated by Providence and its affiliates. As more people continue to come under insurance coverage, the shortage of primary care physicians (PCPs) is only expected to increase. These clinics will address the growing need for easy-to-access and faster care which other settings do not offer. They would also drive sales of OTC and beauty products as visiting patients are likely to make additional purchases. These factors make it a win-win situation not only for drugstores and patients, but also for larger hospital settings, which could utilize their resources for treating more complex conditions. Below we look at some of the factors discussed above in more detail. Our current  price estimate for Walgreens stands at $70, which is at a discount of about 20% to the market price. View our analysis for Walgreens Existing Shortage and Increasing Demand For PCPs According to a new study conducted by the Association of American Medical Colleges (AAMC), demand for physicians is expected to grow faster than supply, leading to a projected shortfall of between 46,100 and 90,400 physicians by 2025. While some demand is generated from changing demographics (i.e., the aging population of baby boomers), the implementation of the Affordable Care Act (ACA) is expected to further drive up demand as more people come under insurance coverage. Considering the health and risk factors of the population likely to gain insurance (out of the 26 million people who otherwise would be uninsured in the absence of ACA and estimated changes in utilization levels), the projected increase in demand for physician services is about 2.0% above that created by changing demographics. Low Pricing and Convenience Are The Key Demand Drivers According to CVS spokesman Brent Burkhardt, convenience is the major factor driving demand for walk-in retail clinics, which also charge less than urgent care centers. Availability at short notice, shorter waiting times and longer opening hours, compared with doctors’ offices, give the retail clinics an upper hand over the latter, especially in case of patients with non-life-threatening but frequent illnesses, such as ear infections, sinus infections or minor cuts. Affordability and fixed pricing make retail clinics even more attractive. Dr. Ateev Mehrotra, an associate professor at the Harvard Medical School and a policy analyst at the research organization Rand Corp, co-authored a study on the quality of care for three common conditions and found encouraging results for these clinics. It was found that the quality of treatment was similar across retail clinics, physician offices and urgent care centers. Additionally, retail clinics were found to offer the services at a significantly lower cost, averaging at $110 compared to $166 at physician offices, $156 at urgent care centers and $570 in emergency departments. Driven by the demand generated by these factors, the number of retail clinics in the U.S. is expected to go up quickly, as pharmacies compete for patients. View Interactive Institutional Research (Powered by Trefis) Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research
    SLB Logo
    Schlumberger To Buy Cameron, Gets A Better Price Than Halliburton-Baker Hughes Deal
  • By , 8/27/15
  • tags: SLB HAL BHI
  • At a time when the free fall of crude oil prices is driving the valuation of energy services companies to an all-time low, the market is set to witness yet another merger leading to further consolidation of the industry. Schlumberger  (NYSE:SLB), the world’s largest oilfield contractor, has announced its plans to acquire Cameron International (NYSE:CAM), an oilfield equipment maker, in a stock and cash transaction valued at $14.8 billion. The market seemed positive about the deal, since Schlumberger’s stock fell only 3.4% on Wednesday, 26 th  August, when the news became public, as opposed to a 12% decline witnessed by its closest competitor Halliburton (NYSE:HAL) when it announced the deal with Baker Hughes (NYSE:BHI) in November last year. Cameron’s stock jumped over 40% within a single trading day. Schlumberger expects to close the transaction, which is likely to be accretive within the first year, by the first quarter of 2016, subject to Cameron’s shareholders’ approval and other regulatory approvals. In this article, we will discuss the deal in the light of its rationale and value accretion to the companies. See Our Complete Analysis For Schlumberger Here   The key highlights of the deal include: Cameron shareholders will receive 0.716 shares of Schlumberger’s common stock and a cash payment of $14.44 for each share held for a total deal value of $14.8 billion. The deal price of $66.36 per share represents a 56.3% premium to Cameron’s closing stock price of $42.46 per share on Tuesday. On closure of the deal, Cameron shareholders will own approximately 10% of Schlumberger’s outstanding shares. Synergies of $300 million and $600 million are expected in the first and second years respectively, making the transaction EPS accretive to Schlumberger in the first year itself. Combined entity will offer the industry’s first integrated drilling and production system to the oil and gas industry clients. Rationale of the deal Due to the uncertain outlook for crude oil prices, it looks next to impossible for energy services companies to grow organically. Hence, in the quest for inorganic growth, the mergers and acquisitions (M&A) activities in the industry have gone up significantly over the last one year. The most talked about of these was the $35 billion deal between Halliburton and Baker Hughes announced last year, which is yet to be completed. The deal threatened to create a combined entity which had the potential to challenge Schlumberger’s industry leading position . Since the announcement of that merger, the market had been waiting for a similar move from Schlumberger. However, the oilfield giant took its own time, and finally decided to acquire Cameron, not only to offer an integrated platform by building on its deepwater partnership, but also to create value for its shareholders. Following are the major drivers behind this deal: Offering Integrated Solutions Cameron is the world’s largest surface wellhead provider offering a vital set of valves, pumps, and blowout preventers which help to control the flow of oil from the underground reservoirs. The deal will allow Schlumberger to bundle its reservoir and well engineering and digital mapping technologies, with Cameron’s surface, drilling, processing, and flow control technologies to offer an integrated “pore-to-pipeline” product to the global oil and gas industry. This will provide a first-mover advantage to the company and enable it to grow its market share in the long term.   Source: Schlumberger and Cameron Conference Call Diversifying Into Deepwater Market Schlumberger and Cameron have been working together since 2012 as partners on OneSubsea, a joint venture created to focus on providing integrated deepwater offerings. Besides, Schlumberger has a track record of buying its joint venture partners. In the past, the company has acquired Smith, WesternGeco, Eurasia Drilling, and Dowell on different occasions. Thus, this merger is not a surprise and was reasonable for it to happen sooner or later. Further, the deal will enable Schlumberger to diversify further into the deepwater market and leverage Cameron’s heavy-duty offshore drilling hardware such as gears and blowout preventers.   Source: Schlumberger and Cameron Conference Call EPS accretive Schlumberger expects to realize pretax synergies of approximately $300 million in the first year and $600 million in the second year. In the first year, the synergies will primarily be cost related which would include reduction of operating costs, streamlining of supply chains, and improving manufacturing processes. In the second year and beyond, the synergies will predominantly come from revenue consolidation. In addition, the company claims that the deal will be accretive to its earnings per share within the first year of deal closure.   Source: Schlumberger and Cameron Conference Call Does The Deal Make Sense? In the current environment where all the energy services companies are struggling to weather the downturn, Schlumberger has actually managed to hold up quite well. The company maintained a flat operating margin despite a notable decline in its top line. Thus, if any energy service company can successfully pull off a merger at this time, it is Schlumberger. Apart from enhancing the company’s product offering, the following are some of the reasons why we think that the deal makes financial sense for the company: Better Price Unlike its competitor Halliburton, Schlumberger has strategically timed its merger with Cameron. Of late, the global markets have plunged due to fears over a slowdown in the Chinese economy. This further pulled down the crude oil prices and reversed all the recovery that took place in the first six months of 2015. This resulted in a further decline in the valuation of energy services companies. Thus, Schlumberger hit the hammer just when the iron was hot and announced this deal. Interestingly, Schlumberger is paying a premium of 56.3% to the shareholders of Cameron, which is identical to the premium paid by Halliburton to the shareholders of Baker Hughes . However, the latter deal was announced almost a year back when oil prices were close to $75 per barrel, as opposed to the current scenario where the oil prices have gone below $40 per barrel. In addition, Cameron’s stock has slipped more than 35% over the last one year. Thus, it is apparent that Schlumberger got a better deal than its competitor. Value Accretive Though Schlumberger claims that the deal will be EPS accretive in the first year itself, we did a quick back of the envelope calculation to cross check the company’s stance. At the end of the June quarter, Schlumberger had a cash balance of over $3.5 billion. This indicates that the company has a strong cash balance to carry out the deal without taking on more debt. Further, based on the cost synergies anticipated by the company, we estimate that the present value of these synergies to Schlumberger’s shareholders will be approximately $3.1 billion (considering Schlumberger’s 90% stake in the combined entity and a discounted rate of 9.8%), which is lower than the cash consideration of $2.8 billion that is being paid to Cameron’s shareholders. Thus, the deal will be value accretive for Schlumberger in the first year as claimed by the company.   Source: Schlumberger and Cameron Conference Call Minimal Regulatory Concerns Unlike the Halliburton and Baker Hughes deal, which is yet to close due to antitrust issues, this deal is more focused on diversification into oilfield equipment supply, rather than eliminating competition. Since Schlumberger and Cameron cater to different markets and clients, the transaction is less likely to attract antitrust issues. Consequently, there are more chances of the deal going through without any divestitures or regulatory hurdles. In a nutshell, we expect the deal to be value accretive for the shareholders of both Schlumberger and Cameron driven by cost and revenue synergies in the short term, and integrated product offerings in the long term. 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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    JNJ's Splenda Sale Shouldn't Be A Concern For Investors
  • By , 8/27/15
  • tags: JNJ PFE MRK
  • Johnson & Johnson  (NYSE:JNJ) has agreed to sell its iconic sweetener product SPLENDA to Heartland Food Products Group. The terms of the deal have not been disclosed yet, but it is not hard to see why the company may no longer be interested in this business. First, Splenda sweetener is part of Johnson & Johnson’s consumer products segment which has operated on very low margins as compared to pharmaceuticals or medical devices businesses. Second, Splenda’s and other sucralose products’ prices are likely to suffer going forward due to weakness in carbonated drinks market globally. Thus, it makes little sense for the company to continue in this business, especially when there are bigger and more promising opportunities on the pharma side. For investors, this is not a move worth contemplating. Our current price estimate for Johnson & Johnson stands at $107, which is at a premium of more than 10% to the market price. While the global markets have fluctuated recently, we believe that Johnson & Johnson’s longer term outlook doesn’t warrant material change as of now.
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    Is ‘Fast Fashion' Hollister Triggering A Turnaround In Abercrombie's Growth?
  • By , 8/27/15
  • tags: ANF AEO ARO
  • Abercrombie & Fitch ‘s (NYSE:ANF) shares opened up by almost 10% after its Q2 earnings release on August 26th, as it comprehensively beat market expectations on revenues and profits. While the namesake brand remained weak, Hollister exhibited tremendous strength with its updated merchandise mix and store environment. For more than a year, the retailer has been trying to transform  Hollister into a ‘fast-fashion’ brand by replacing its logo merchandise with fashion-focused products, dialing down the steamy ‘sex-appeal’ aura of its stores and overhauling the back end of the brand to improve the speed to market. These efforts are beginning to show promising results now, as Hollister’s comparable sales fell only 1% in Q2, which is a significant improvement over 6% decline in Q1. Although some of the visible improvement in Hollister’s comparable sales can be attributed to a weak comparable, Abercrombie believes that the brand’s advancement is sustainable. This suggests that Hollister, contributing over 50% to net revenues, may indeed be triggering a turnaround in the company’s growth. In fact, Hollister’s success with its fashion overhaul can set the precedent for other struggling casual apparel retailers as well. On the other hand, A&F is still struggling in its quest to become a classic premium brand, recording a comparable sales decline of 7% during the quarter. Abercrombie said that its mainline brand transition is taking longer than expected, which can keep its growth at bay in the near term. Nevertheless, we believe that it is headed in the right direction and a turnaround seems attainable, though it can take some time. Our price estimate for Abercrombie & Fitch stands at $29, implying a significant premium to the current market price. See our complete analysis for Abercrombie & Fitch Earnings And Guidance Were Encouraging Abercrombie’s net sales for the second quarter declined 8.2% to $818 million, but was still ahead of the consensus estimate. Gross profits margins improved 110 basis points to 62%, as the retailer was able to reduce its average unit costs despite the rapid infusion of fashion-forward products in its portfolio. Another reassuring factor for the company was that its average unit retail in the U.S. continued to stabilize, implying a marginal decline in the level of promotional activities. Marketing, general and administrative expenses, excluding the impact of lawsuit settlement charges, declined $6.2 million year over year, indicating robust progress on cost cutting efforts. Overall, the company reported adjusted profits of $8.6 million or $0.12 per share, way ahead of the consensus estimate of a loss of $0.04 a share. For the second half of the year, the company expects further improvement in comparable sales and gross margins on a constant currency basis, which is an encouraging sign for the investors.  Most of the improvement so far and the expected rise going forward is attributable to Hollister, where the company has made tremendous progress.   Hollister’s Comeback Holds Upside Potential Hollister’s performance has improved considerably over the past several quarters driven by Abercrombie’s consistent efforts to reinvent the brand. Once know for its casual apparel infused with laid back lifestyle of Southern California, the retailer has now affixed a ‘fast-fashion’ tag on it, having made significant changes in its product portfolio and shopping environment. Executive chairman, Arthur Martinez said that Hollister has gained quick traction, thanks to the company’s efforts of replacing basic logo inventory with fashion-forward merchandise and creating a relevant store and web environment.   In almost 100 stores, shutters on the store windows have been replaced by video screens and signature scent has been dialed down by 75%. Five remodeled stores, which are lighter and brighter with subtle interiors that no longer have artificial trees, leather sofas and oriental rugs, have been performing very well. We believe that once these formats are rolled out on a larger scale, Hollister will be able to record even better results and drive the company’s growth. The management stated that customers have so far responded positively to the updated Hollister, indicating an impending recovery for Abercrombie. We currently estimate Hollister’s revenue per square feet to decline about 5% this year to $338 and increase at an average annual rate of 1.3% thereafter for the next five-six years to reach $366. However, low-mid single digit rise in comparable sales over the next three-four quarters, can reduce the intensity of decline this year and bolster the growth in the metric thereafter. If revenue per square feet of ‘fast-fashion’ Hollister reaches $390 by the end of our forecast period and e-commerce growth accelerates a little, there could be about 5% upside to our price estimate for the company. But, A&F Still Needs Some Work While Abercrombie has been seamlessly developing the ‘fast-fashion’ version of Hollister, progress on A&F has not been as healthy.   Over the past three quarters (the product transition phase), while the fall in A&F’s comparable sales has slowed down marginally, the magnitude of decline remains high, at -7%.  It has improved notably over that past two quarters, however, as seen in the illustration below. The company’s management indicated last year that they plan to turn A&F into a classic premium brand, but it appears that it is still struggling to find its place in the market. This is where the new leadership structure comes in. Abercrombie has completely overhauled the brand leadership structure for A&F  in order accelerate its recovery. Knit category has been the most challenging for the brand, and perhaps that is where the new leaders should focus initially. 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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    Medtronic Bets Nearly Half A Billion Dollars On Transcatheter Mitral Valve Market
  • By , 8/27/15
  • tags: MDT ABT ISRG
  • Earlier this week, medical devices manufacturer Medtronic (NYSE:MDT) entered into an agreement to purchase Twelve Inc., a medical device startup focused on the development of a transcatheter mitral valve replacement, for $458 million. The acquisition is a bet on the Transcatheter Mitral Valve Replacement (TMVR) market, which is currently non-existent since no such devices have been approved so far. Medtronic’s latest acquisition follows similar acquisitions by rivals Abbott Laboratories (NYSE:ABT) and Edwards Lifesciences in the race to provide the first TMVR device.
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    VMware Includes Windows 10 Upgrades On Desktop Virtualization Suites For Mac And Windows
  • By , 8/27/15
  • tags: VMW EMC NTAP MSFT
  • Virtualization giant VMware (NYSE:VMW) announced upgrades for its desktop virtualization software suites VMware Fusion (for Mac) and VMware Workstation (for Windows). The enhanced desktop hypervisors allow users to run Windows 10 sessions on their existing Mac or Windows computers systems. The company made these announcements just days after virtualization company Parallels announced the release of its latest software Parallels 11 for Mac systems. VMware, the industry leader in providing virtualization and cloud computing software and services, reported a strong set of quarterly results last month despite a slowdown in software licenses revenues. Services revenues drove much of the growth for VMware. The launch virtualization software that supports Windows 10 could help the company generate higher license revenues. During the most recent earnings call, the company issued guidance of license revenues of about $680 million in Q3, which is about 6-7% higher on a year-over-year basis. Net revenues could rise by about 9-10% to $1.65 billion. Below we discuss the key trends driving the desktop virtualization market segment and how it impacts VMware.
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    Nokia Set To Ride The 4G Wave In India
  • By , 8/27/15
  • tags: NOK ERIC
  • India is one of the most promising markets for telecom equipment manufacturer Nokia (NYSE:NOK), with wireless carriers set to make robust investments in 4G LTE roll-outs and network upgrades. Major telecom operators are planning to up the ante with their capital spending, following the country’s largest spectrum auction earlier this year. The estimated market opportunity for telecom equipment companies is over $1 billion, which is expected to rise going forward as 4G deployment across the country accelerates. While competition is high, Nokia appears well-equipped to take advantage of the country’s massive 4G LTE roll-out, as it has been winning deals faster than its peers. Over the past 18 months, the company has bagged over 64 deals with various telecom operators and it expects to add more by the year end. Nokia already has some major deals with Bharti Airtel, the market leader and the first mover into the 4G space, which bodes very well for the company. It has also inked some valuable deals with other telecom operators including Reliance Jio, Vodafone and Idea Cellular for network upgrades. As these companies continue to expand their respective services across the country, Nokia stands a good chance of winning more contracts, which can keep its growth running. Our $8 price estimate for Nokia is around 30% higher than the current market price.
    Strike While the Iron is Hot
  • By , 8/27/15
  • tags: SYLD SPY
  • Submitted by Sizemore Insights as part of our contributors program Strike While the Iron is Hot by  Charles Lewis Sizemore, CFA I don’t usually drink on a Monday afternoon. But this week, I made an exception. Once the market had closed, I snuck out of the office for a cold beer (a Shiner Bock, of course). And then I ordered a second one. It had been that kind of day. But here’s the thing: While wild market volatility is nerve wracking, these are the days when the best opportunities present themselves. I’m not bragging or exaggerating when I say that I made 30% in about 15 minutes Monday, and I did so while taking no risk whatsoever. No, I’m not that good. I got lucky. I happened to stumble into a mispriced security, and I struck while the iron was hot. Let me give you the details. I opened my trading screen to find that an ETF I owned, the Cambria Shareholder Yield ETF ( SYLD ) had dropped by 50% in value. It had lost half its value from Friday’s close. Remember, ETFs are not stocks. They are exchange-traded mutual funds that, by their very construction, are supposed to follow an index. At least in theory, an ETF’s price can never deviate too far from the index it tracks because large institutional investors would be able to earn a risk-free arbitrage profit by creating or destroying shares. In the case of SYLD, we had a mispricing that was theoretically impossible. The ETF’s price was down by 50%…while the actual portfolio of stocks that SYLD tracks were down maybe 4% at most. In a normal functioning market, a large trader could earn a risk free profit by buying up a large block of shares of SYLD, breaking the apart, and selling the underlying portfolio stock in the market. But on a trading day like Monday, you don’t have a normal, functioning market, and you get mispricings like these. (SYLD wasn’t the only ETF whose pricing became untethered from reality. It’s just the only one I happened to be trading at the time.) I did what any rational investor would do: I plowed every dollar I could find into SYLD shares before the mispricing window closed. I made about 30% in 15 minutes, sold the shares and went on about my day. I tell this story not to toot my own horn. I’m the first to admit that I got phenomenally lucky here. But there are definitely some lessons we can learn from this. To start, ETFs – and particularly niche ETFs like SYLD – can be thinly traded and illiquid. SYLD has an average daily trading volume of less than 30,000 shares per day. That’s a problem if you are a large shareholder and you want to unload your shares in a hurry. You run the risk of moving the market, and that’s exactly what happened Monday. But this same illiquidity can create fantastic short-term opportunities if you’re willing to take the other side of the trade and you are small and nimble enough to act. If I had been running a multi-billion-dollar hedge fund, I wouldn’t have been able to make this trade. Given the small number of shares that traded, I wouldn’t have been able to place a large enough order to matter or my orders wouldn’t have been filled in time. I was also able to jump on this because I wasn’t fully invested. I had a little dry powder… just in case. In order to take advantage of opportunities like these, you need to keep a little cash on hand. Keep your eyes open. We’ll have more volatility in the months to come… and plenty of good short-term opportunities. This post first appeared on Economy & Markets . 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 Strike While the Iron is Hot
    This Overseas Telecom Play is Dialed In
  • By , 8/27/15
  • tags: VOD VZ
  • Submitted by Wall St. Daily as part of our contributors program This Overseas Telecom Play is Dialed In By Tim Maverick, Senior Correspondent In the search for income, it can often be useful to see what “the big boys” are buying. Take David Einhorn, for instance. He’s one of the most successful hedge fund managers out there – his Greenlight Capital LP fund has averaged returns of nearly 20% annually since 1996. It’s interesting, then, to see that global telecommunications giant Vodaphone Group PLC ( VOD ) has been one of his favorite high-yield dividend stocks for years. The company has mobile networks in 26 countries and partners with mobile firms in another 50. It services 400 million mobile customers worldwide. Currently, its stock yields 6.3%. U.S. investors may remember that, in 2013, Vodaphone sold its 45% stake in Verizon Wireless to Verizon Communications Inc. ( VZ ) for $130 billion. Since then, Vodaphone hasn’t just been sitting on its cash pile. In addition to buying out minority partners in fast-growing markets such as India, the company is wisely upgrading its global network, including spending $28 billion to upgrade to 4G. This is a logical move considering that in Europe, one of its core territories, only about 6% of its customers are using 4G. Vodaphone expects to have 4G coverage throughout most of Europe within a year or so, and that will be a significant differentiator. In fact, Vodaphone CEO Vittorio Colao told the Financial Times that more of Europe was returning to growth “as customer demand for 4G and data takes off.” High-Yield and Secure Vodaphone has treated dividend investors very well over the years, increasing its dividend an annualized 8.8% since 2010. Plus, the United Kingdom (where Vodaphone is based) doesn’t withhold taxes on dividends for U.S. investors. Going forward, the dividend looks solid for a number of reasons. First, there’s still about $17 billion in cash left over from the Verizon deal. Second, the company’s cash flow is steady, and the stock is trading at a relatively cheap seven times expected 2015 cash flow. Finally, with 80% of its revenues coming from mobile users, a return to growth in its core business is a great sign. Income investors may end up getting a nice capital gains kick from this stock, as well. You see, Vodaphone is continuing to hold talks with John Malone’s Liberty Global PLC ( LBTYA ) about swapping assets in Europe – or even a possible merger. Now, it’s unlikely that Liberty Global would overtake Vodaphone because of the two companies’ sharply contrasting corporate cultures. Vodaphone is a low-debt, high dividend company, while Liberty Global follows Malone’s strategy of fast, debt-financed growth and zero dividends. But assets swaps make perfect sense as Liberty’s cable assets mesh nicely with Vodaphone’s wireless assets in Europe. Perhaps a symbiotic joint venture is possible . . .   Or, Vodaphone could even buy out Liberty, if Malone is willing to sell. If some sort of deal is reached, don’t be surprised if the company is split into two, with Vodaphone’s large emerging market networks spun off into a new and faster-growing company. In the meantime, enjoy the stable income that this hedge fund favorite can provide. Good investing, Tim Maverick The post This Overseas Telecom Play is Dialed In appeared first on Wall Street Daily . By Tim Maverick
    The Flash Crash of 2015
  • By , 8/27/15
  • tags: SDY VIG
  • Submitted by Wall St. Daily as part of our contributors program The Flash Crash of 2015 By Alan Gula, Chief Income Analyst Monday morning, August 24, found me sitting aboard a ferry called the Jessica W, furiously reading the news and checking stock quotes on my phone. I was returning from a relaxing vacation on Block Island, which is located about 12 miles off the coast of Rhode Island. I couldn’t believe it – I was traveling during one of the most chaotic financial market events in years. My friends sat in amazement as I summarized the astonishing events unfolding that morning. A global stock market rout had set the stage for panic selling in the United States. Equity index futures and pre-market trading had suggested the day would be ugly, and the U.S. stock market open at 9:30 a.m. was chaotic. Large, bellwether stocks were going “bidless.” For example, General Electric ( GE ), JPMorgan ( JPM ), Ford Motor ( F ), PepsiCo ( PEP ), Colgate-Palmolive ( CL ), and CVS Health ( CVS ) all declined over 20% at one point before bouncing back. Amid the turmoil, many exchange-traded funds (ETFs) deviated significantly from their underlying net asset values. The popular dividend ETFs – SPDR S&P Dividend ETF ( SDY ), Vanguard Dividend Appreciation ETF ( VIG ), and iShares Select Dividend ETF ( DVY ) – were particularly hard hit. I’ve compiled a list of some of the more remarkable low “prints” in the table below: Macro events may have been the overall catalyst for this broader market selloff, but these brief, sharp declines in individual stocks occur because of a lack of liquidity. In other words, the number and size of the bids were insufficient to handle the volume of sell orders. This is an example of how high-frequency trading (HFT) leads to market instability. During times of market stress, market-making algorithms are less likely to provide liquidity than human traders tasked with maintaining an orderly market. Basically, because of HFT, there’s less liquidity when there’s acute risk aversion and everyone wants to sell. This is a recipe for disaster. Furthermore, in the post-crisis era, bouts of risk aversion have proliferated without stimulus. Late last year, I warned that we would have another flash crash in the absence of quantitative easing (QE). Well, we just had one. To be sure, Monday’s 5.3% intraday decline in the S&P 500 was smaller than the 8.6% drop on May 6, 2010. But make no mistake, the U.S. stock market experienced an extraordinary liquidity event on Monday, and there are likely more to come. Safe (and high-yield) investing, Alan Gula, CFA The post The Flash Crash of 2015 appeared first on Wall Street Daily . By Alan Gula
    American Airlines Group Logo
  • commented 8/26/15
  • tags: AAL
  • HOW I GOT MY LOAN PLEASE CONTACT THEM TODAY FOR YOUR LOAN

    Hello my dear people , I am Anita Frank, currently living in New jersey city, USA. I am a widow at the moment with three kids and i was stuck in a financial situation in April 2015 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit ,do not full prey to those hoodlums at there that call them self money lender they are all scam , all they want is your money and you well not hear from them again they have done it to me twice before I met Mr. Wilson Edwards the most interesting part of it is that my loan was transfer to me within 74hours so I will advice you to contact Mr. Edwards if you are interested in getting loan and you are sure you can pay him back on time you can contact him via email......... (wilsonedwardsloancompany@gmail.com) No credit check, no co signer with just 2% interest rate and better repayment plans and schedule if you must contact any firm with reference to securing a loan without collateral then contact Mr. Wilson Edwards today for your loan
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    [ less... ]
    HOW I GOT MY LOAN PLEASE CONTACT THEM TODAY FOR YOUR LOAN Hello my dear people , I am Anita Frank, currently living in New jersey city, USA. I am a widow at the moment with three kids and i was stuck in a financial situation in April 2015 and i needed to refinance and pay my bills. I tried seeking loans from various loan firms both private and corporate but never with success, and most banks declined my credit ,do not full prey to those hoodlums at there that call them self money lender they are all scam , all they want is your money and you well not hear from them again they have done it to me twice before I met Mr. Wilson Edwards the most interesting part of it is that my loan was transfer to me within 74hours so I will advice you to contact Mr. Edwards if you are interested in getting loan and you are sure you can pay him back on time you can contact him via email......... (wilsonedwardsloancompany@gmail.com) No credit check, no co signer with just 2% interest rate and better repayment plans and schedule if you must contact any firm with reference to securing a loan without collateral then contact Mr. Wilson Edwards today for your loan They offer all kind of categories of loan they Short term loan (5_10years) Long term loan (20_40) Media term loan(10_20) They offer loan like Home loan............., Business loan........ Debt loan ....... Student loan..........,Business start up loan Business loan....... , Company loan.............. etc Email..........(wilsonedwardsloancompany@gmail.com ) When it comes to financial crisis and loan then Wilson Edwards loan financial is the place to go please just tell him I Mrs. Anita Frank direct you Good Luck.......................
    PM Logo
    Can Defensive Stocks Defend Themselves Against The Stir In Emerging Markets?
  • By , 8/26/15
  • tags: DIAGEO PM DEO
  • Many firms of late have been targeting the emerging world to achieve growth, and until very recently, this strategy was very well justified. With GDP growing at a double digit rate in countries across Asia, Africa, and Latin America, sales flourished for many companies. This is particularly true for names such as Philip Morris International (NYSE:PM) and Diageo (NYSE:DEO). At a time when rising health awareness and regulatory crackdown surrounding the sale of products such as alcohol and tobacco tightens in developed markets across North America and Europe, these companies have increasingly diversified operations across developing markets, where economic growth, slacker regulation, and a growing middle class population has been driving sales. More recently however, the developing world has been facing problems, against which the phenomenal growth it was otherwise achieving has been hampered. What could this development mean for conglomerates such as Philip Morris and Diageo? Is this the turning point for these stocks or will there be a rebound? Let’s start by backing up a bit. The global financial meltdown back in 2008 was predominantly a crisis that started from the developed world, involving American and European banks. Even as contagion spread across different parts of the world, large emerging economies such as China and India recovered rather quickly and became the engines for global growth in the ensuing years. Many economists spoke of how these countries, along with others such as Brazil, Russia, Turkey, Indonesia, Nigeria, and Mexico could be the future of the world economy. And this seemed to pretty much actualize until recently. Historically, most countries have driven growth through exports. But this works only if exports can find a market, which has, for the most part, been China. More recently, the Chinese economy has experienced a slowdown. The result — a number of markets that supplied China with components, finished goods, fuel, and raw materials have faced a slump. The Chinese economic slowdown was also a major contributor to declining oil prices. The result — a recession in a number of oil exporting countries such as Russia and Venezuela. One might argue that cheaper oil should ideally not have such a major consequence on world economic growth since turmoil in oil exporting countries could be offset by higher purchasing power for consumers in oil importing countries. But this release of disposable income has hardly resulted in higher spending activity. To make matters worse, China is attempting to revive its exports after a report in June suggested an 8.3% decline. They are doing this predominantly by devaluing the Chinese yuan to increase the price competitiveness of their goods in the global market. Is there more to come? The answer lies in China’s August numbers that showed the fastest decline in manufacturing witnessed in more than six years. This could spell further depreciation of the yuan going forward. What could the impact be? For one, a depreciating yuan could trigger some sort of a currency war, where other countries also peg their currencies at lower levels to stay afloat in the exports market. This has already started, with names such as Azerbaijan, Georgia, Kazakhstan, and Vietnam devaluing their currencies over the past year. Moreover, these developments have sent financial markets into a tailspin, with leading indices such as the Dow Jones, FTSE 100, and S&P 500 declining approximately 10% since August 17. Now, what impact could this have on conglomerates such as Philip Morris and Diageo, who have been banking on the emerging market phenomenon to fuel growth? 1 — Slower economic growth could immediately translate into slower growth of purchasing power of people and a slower expansion of the vital middle class population. Given that the demand for alcohol and cigarettes tends to be relatively acyclical, in that they are slower to respond to business cycle fluctuations, Diageo and Philip Morris could breathe a sigh of relief. In spite of this, although these names may not lose out significantly in terms of volumes, they may lose out on revenues as new customers choose brands in the economy category and existing customers down-trade to less premium options. 2 — Devaluation of a number of key emerging market currencies vis-a-vis the dollar is bound to exert an adverse impact on the company’s financials. While on the one hand a devalued currency discourages demand by making international offerings more expensive in the domestic currency, money made in the domestic market could translate into fewer dollars to negatively impact the company’s income statement. 3 — Third, while Diageo and Philip Morris have resorted to price hikes to maintain revenues in developed markets, this option may not be viable in emerging markets. This is because demand in these markets are more sensitive to price changes. According to one study, while the price elasticity of demand for cigarettes is estimated to be 4% in developed markets, it is estimated at 8% in developing markets, i.e. a 10% increase in price could lead to an 8% decline in demand. At these rates, price hikes may only exacerbate the declining volumes to pull revenues even lower. Now, would the current events send emerging economies spiraling downwards? Clearly, the world economy is in a turmoil at present and history is repeating itself — where a Chinese devaluation is leading to a wave of devaluations, just as the Federal Reserve prepares to tighten monetary policy with rate hikes. Twenty one years back, these very steps resulted in the Asian financial crisis. However, things may be different this time. For one, even as a number of Asian and Eastern European countries follow through with devaluations, this time simply may be different since Asian economies are better cushioned in terms of their fiscal positions and currency reserves to weather the storm. Furthermore, given the exposure to a number of crises, including the massive crisis in 2008, most countries may be better prepared to deal with such situations. Second, there may be a limit up to which China would be willing to devalue its currency since it could, in fact, harm its own economy. According to Nomura, total Chinese external liabilities are estimated at $1.135 trillion. In this case, repaying dollar denominated borrowings will not only become increasingly expensive, but would also curtail future borrowing capability for Chinese companies. Clearly, when the motive behind the devaluation is to stimulate the economy, China may not pursue this policy beyond a point if it is, in fact, defeating the purpose. For now, stocks such as Diageo and Philip Morris are called “defensive stocks,” in that they are stable even during economic contractions. However, only time will tell if they will actually be able to defend themselves against this stir in the emerging world. While we anticipate some currency related losses in the short to medium term, the companies could see growth in the longer term backed by innovations and strong business fundamentals. Trefis has a  $115 price estimate for Diageo, which is above the current market price. See Our Complete Analysis For Diageo Here We have a price estimate for Philip Morris’ stock price of around $82,  which is almost in line with the current market price. See Our Complete Analysis For Philip Morris International View Interactive Institutional Research (Powered by Trefis): Global Large Cap  |  U.S. Mid & Small Cap  |  European Large & Mid Cap  |  More Trefis Research
    United Technologies Logo
  • commented 8/26/15
  • tags: UTX
  • Global Power Tools Market is Anticipated to Grow at a CAGR of 5.4% through 2025

    Future Market Insights (FMI) delivers key insights on the Global Power Tools Market in its upcoming report titled "Power Tools Market: Global Industry Analysis and Opportunity Assessment 2015–2025".

    The global power tools market is projected to register a promising CAGR of 5.4% during the forecast period due to several factors. The report details trends driving each segment and respective sub-segments, delivering analysis and insights about the potential of the power tools market in specific regions.

    With respect to regions, North America dominated the power tools market with over 26% market share in 2014, and is expected to remain dominant by 2025. Western Europe accounted for over 23% of the total power tools market share in 2014 but will lose it dominance by 2025. Among all the regions, Middle East and Africa is projected to register the highest CAGR between 2015 and 2025, due to high demand for infrastructure investment in the region. As on 2014, Asia Pacific accounted for over 22% market share of the overall power tools market, positioning itself as the third highest contributor. By the end of 2025 it will gain more than 100 Basis Point Share to become the second highest contributor of the overall power tools market.

    Browse Full: "Power Tools Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025" Market Research Report at http://www.futuremarketinsights.com/reports/power-tools-market

    Growth of the global power tools market is primarily driven by increasing housing investments, automotive sales and urbanization. According to the UN, the world population is expected to increase by 20% between 2015 and 2025, with Asia and Africa projected to contribute significantly to this growth, this is expected to further urbanisation and the subsequent need for hand and power tools. Middle East and Africa recorded tremendous growth in the construction sector over the last five years, and continued high demand for infrastructure investment across the region will further boost the demand for power tools.

    Other factors fuelling market growth include trends such as do-it-yourself (DIY) and adoption of new cordless technologies with lithium-ion batteries that deliver performance advantages compared to the plug-in models. Additionally, Chinese vendors offering products at competitive prices as compared to other power tool vendors has boosted the sales of power tools.

    On the basis of category, the market has been segmented into power and hand tools. The power tools segment accounted for over 64% share of the global power tools market in 2014. Furthermore, power tools segment was dominant among the two segments, accounting for 64.6% share of the global power tools market in 2014.

    For more insights on Global Power Tools Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-760

    Power tools are further segmented on the basis of end-use sectors i.e. industrial and household. Revenue contribution of the industrial segment was 59.6% in 2014, and is projected to grow to 63.0% by 2025, witnessing an increase of 340 Basis Point Share and registering a CAGR of 5.9%.

    By mode of operation, the power tools market is segmented into electric, pneumatic and others segments. The pneumatic tools segment is expected to register the highest CAGR of 5.9% between 2015 and 2025. The electric tools segment accounted for over 57% market share in 2014, but is expected to lose its market share by 120 Basis Point Share to the pneumatic segment by the end of the forecast period.
    Key players in the global power tools market include Stanley Black & Decker Inc., Atlas Copco AB, Robert Bosch GmbH, Techtronic Industries Company Limited. Stanley Black & Decker Inc. and Robert Bosch GmbH focus on research and development initiatives to introduce innovative products to attain sustainable advantages over the competition. In addition, these players also focus on expanding their global presence through mergers and acquisitions and new product development.

    Press Release: http://www.futuremarketinsights.com/press-release/power-tools-market
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    Global Power Tools Market is Anticipated to Grow at a CAGR of 5.4% through 2025 Future Market Insights (FMI) delivers key insights on the Global Power Tools Market in its upcoming report titled "Power Tools Market: Global Industry Analysis and Opportunity Assessment 2015–2025". The global power tools market is projected to register a promising CAGR of 5.4% during the forecast period due to several factors. The report details trends driving each segment and respective sub-segments, delivering analysis and insights about the potential of the power tools market in specific regions. With respect to regions, North America dominated the power tools market with over 26% market share in 2014, and is expected to remain dominant by 2025. Western Europe accounted for over 23% of the total power tools market share in 2014 but will lose it dominance by 2025. Among all the regions, Middle East and Africa is projected to register the highest CAGR between 2015 and 2025, due to high demand for infrastructure investment in the region. As on 2014, Asia Pacific accounted for over 22% market share of the overall power tools market, positioning itself as the third highest contributor. By the end of 2025 it will gain more than 100 Basis Point Share to become the second highest contributor of the overall power tools market. Browse Full: "Power Tools Market: Global Industry Analysis and Opportunity Assessment 2015 - 2025" Market Research Report at http://www.futuremarketinsights.com/reports/power-tools-market Growth of the global power tools market is primarily driven by increasing housing investments, automotive sales and urbanization. According to the UN, the world population is expected to increase by 20% between 2015 and 2025, with Asia and Africa projected to contribute significantly to this growth, this is expected to further urbanisation and the subsequent need for hand and power tools. Middle East and Africa recorded tremendous growth in the construction sector over the last five years, and continued high demand for infrastructure investment across the region will further boost the demand for power tools. Other factors fuelling market growth include trends such as do-it-yourself (DIY) and adoption of new cordless technologies with lithium-ion batteries that deliver performance advantages compared to the plug-in models. Additionally, Chinese vendors offering products at competitive prices as compared to other power tool vendors has boosted the sales of power tools. On the basis of category, the market has been segmented into power and hand tools. The power tools segment accounted for over 64% share of the global power tools market in 2014. Furthermore, power tools segment was dominant among the two segments, accounting for 64.6% share of the global power tools market in 2014. For more insights on Global Power Tools Market, you can request a sample report at http://www.futuremarketinsights.com/reports/sample/rep-gb-760 Power tools are further segmented on the basis of end-use sectors i.e. industrial and household. Revenue contribution of the industrial segment was 59.6% in 2014, and is projected to grow to 63.0% by 2025, witnessing an increase of 340 Basis Point Share and registering a CAGR of 5.9%. By mode of operation, the power tools market is segmented into electric, pneumatic and others segments. The pneumatic tools segment is expected to register the highest CAGR of 5.9% between 2015 and 2025. The electric tools segment accounted for over 57% market share in 2014, but is expected to lose its market share by 120 Basis Point Share to the pneumatic segment by the end of the forecast period. Key players in the global power tools market include Stanley Black & Decker Inc., Atlas Copco AB, Robert Bosch GmbH, Techtronic Industries Company Limited. Stanley Black & Decker Inc. and Robert Bosch GmbH focus on research and development initiatives to introduce innovative products to attain sustainable advantages over the competition. In addition, these players also focus on expanding their global presence through mergers and acquisitions and new product development. Press Release: http://www.futuremarketinsights.com/press-release/power-tools-market
    YELP Logo
    As Growth At Yelp’s Local Ads Business Slows, Mobile Ad Growth Takes Center Stage
  • By , 8/26/15
  • tags: YELP GOOG YHOO MSFT
  • Over the past few months, Yelp ’s (NYSE:YELP) stock price has plunged by nearly 60%. However, we estimate that Yelp’s stock is worth $30.29 based on the total addressable market (TAM) for its core local ads business. According to Borell Associates, in 2015 local digital advertising spending will hit $47.8 billion globally, accounting for two-fifths of the $115 billion local advertising market in the world, which includes internet, bill board and TV ads. Furthermore, Yelp has access to over 76 million local businesses across the the USA, Europe, Latin America and parts of Asia. Considering the markets Yelp operates in, we expect that Yelp’s local ads business to grow, albeit at a slower pace. However, most of the growth for Yelp is expected to come from its mobile app as local mobile ads take center stage. In this note, we explore the factors that will help the growth in its local ads business, and why the mobile platform will provide most of the growth in the coming years. Check out our complete analysis of Yelp Local Ads Business to Grow, Albeit At Slower Pace According to our estimates, the local ads business makes up over 73% of Yelp’s estimated value. The key drivers for this division are the average revenue per active local business account and the number of active local business accounts listed with Yelp. According to BIA/Kelsey, online local ad spending in the U.S. is expected to increase from $31 billion in 2014 to $35 billion in 2015. As stated earlier, the company has a total addressable market (TAM) of 76 million local businesses in the world, of which 53 million are present in the Americas and Europe. However, the number of active advertising business, which pay for Yelp’s services, listed with the company is just a fraction of this market at 97,000 in Q2 2015. While we expect that the base effect will limit the active business listing CAGR to 30%, we believe that the company can add at least 359,000 active business accounts by 2022. The factors that will impact growth are as follows Mature Cohorts Conversion: The number of claimed businesses, which have a listing with Yelp but do not pay for any of the premium services, stands at over 2.3 million. Most of these businesses are in regions where Yelp has been operational for more than five years. Considering that mature markets witness higher conversion rates from claimed businesses to active businesses, we expect strong growth in active business accounts from these regions. International Expansion to Help With Growth: One of the key to Yelp’s growth has been its expansion in international markets, which not only increases the cumulative reviews on the Yelp site but also increases its appeal to advertisers and users alike. As a result, international traffic grew over 40% year over year to approximately 29.93 million unique visitors on a monthly average basis. Furthermore, the company said that revenue from international markets is expected to gain traction in the coming quarters as it monetizes regions such as cohorts in Italy which were setup three years ago. We expect this expansion spree to bolster the number of active business accounts on Yelp in the coming years. While we expect that the base effect will limit the active business listing CAGR to 30%, we believe that the company can add at least 359,000 active business accounts by 2022. Average Revenue Per Active Business To Grow :- Average revenue per active local business (ARPALB) is one of the most important drivers in our valuation for Yelp’s locals ads business. According to Yelp, the monetization rate of a city or region increases with time as more businesses sign up for premium services such as dedicated webpages and call to action to promote their products or services. The company’s ARPALB improved to $7,749 for regions where Yelp started offering services in 2005, and to $546 for regions where Yelp services started in 2010. However, as Yelp introduces its services in new regions, we expect blended ARPALB to grow at a slower pace, as new regions such as Latin Americas have less spending power compared to the U.S., and fewer businesses in these regions are willing to pay for premium Yelp services.   [ trefis_forecast ticker=”YELP” driver=”0882″] Mobile Local Ads To Power Growth In The Future Over the past few years, online mobile ads have come to the fore and displaced online desktop ads from the top position. As a result, more ad dollars are now budgeted for mobile ads and the allocation for mobile local ads has also increased over the past few quarters. In April 2015, BIA/Kelsey estimated that US mobile location-targeted ad spending would rise 56% this year, versus 37% growth for national (not location-targeted) placements. BIA/Kelsey forecast that mobile location-targeted ads would continue to outpace national placements in spending increases through at least 2019. It expects that ad spending is to hit $18.2 billion for national placement and $24.4 billion for mobile location-targeted ads. Most of the users have a tendency to check up on local businesses, particularly restaurants, when they are on the move. As a result, Yelp’s mobile app has gained traction in the recent quarters. For example in Q2 2015 monthly mobile unique visitors outpaced desktop visitors. While the company reported nearly 83 million unique users for mobile app and web, the desktop user count was stagnant at 79 million. Furthermore, 55% of new reviews and 56% of the ad impressions came from mobile devices. Considering the rampant growth in the usage of mobile devices, we expect the mobile platform to become a major revenue driver for Yelp in the coming years. We believe adoption of Yelp’s mobile platform will drive this growth in unique visitors on the Yelp site, which in turn will lead to more businesses signing up for Yelp. This will also help the company to improve ARPABLB. Our price estimate for Yelp stands at  $30.29, which is 32% above its current market price. Understand How a Company’s Products Impact its Stock Price at Trefis Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    NFLX Logo
    Why We Believe Netflix Will Continue To Raise Subscription Fees Periodically In Coming Years
  • By , 8/26/15
  • tags: NFLX
  • Streaming giant  Netflix  (NASDAQ:NFLX) has decided to raise subscription prices in Europe. This is in-line with our long term view of the company. We believe that Netflix has enough room to raise prices of its subscription packages in both the domestic and international markets and the company will continue to increase prices at periodic intervals over the next few years. Netflix’s pricing power comes from the exclusivity of its’s current and future original content, along with the repository and complementary nature of its services. Consequently, we believe that Netflix’s average revenue per subscriber will be around $10.30 domestically and $9.00 internationally by 2022.
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    How It Might Be A Lose-Lose Situation For Volkswagen In China
  • By , 8/26/15
  • tags: VOLKSWAGEN-AG VLKAY GM TM TTM F TSLA DAI DDAIF
  • When the tide is high, it takes out everything in sight, even the entities that once seemed formidable. Volkswagen AG (OTCMKTS:VLKAY) has for a few years now depended on its sales in China to fuel overall growth. The group is the highest-selling automaker in the country, where the motorization rate is approximately 100 vehicles per 1000 individuals, compared to nearly 800 vehicles per 1000 individuals in the U.S.– so there is still room for growth in China. However, in China, the slowing economic conditions, precipitous fall in the stock market, slowdown of infrastructure and real estate sectors, has hurt customer sentiment, and the spillover of this can also be seen in the country’s automotive market. We have a  $46 price estimate for Volkswagen AG, which is above the current market price. The stock has declined a considerable 26% in the last three months alone. See Our Complete Analysis For Volkswagen AG Sales of passenger vehicles in China are up 3.4% year-over-year through July, but sales have fallen in each of the last two months, including a 6.6% decline in July. The volatility in the Chinese auto market could continue through the rest of the year, and the market could possibly even see a decline in the number of vehicles sold for the full year (over 2014 levels), as per the low end projections by Ford, for the first time since at least 1998, before which only production numbers are available for China. 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 now the country has cut interest rates, flooding its banking system with liquidity. A devalued renminbi might be helpful for domestic manufacturers who export, although some still argue how the one-off devaluation might not be enough, but where does it leave the foreign automakers? The Chinese customers, who typically chose the globally recognized and popular foreign brands are now reverting to the domestic manufacturers. Why? Because 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. A tough pricing environment in China, and slight reduction in disposable incomes, have 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. Volkswagen has also surrendered share in China this year, with its vehicle deliveries declining by 5.3% year-over-year through July, compared to the 0.4% rise in all automobile sales in the country. Devaluation of the renminbi will further hurt Volkswagen. Although the Volkswagen Group China and its two joint ventures — Shanghai Volkswagen and FAW-Volkswagen —  locally produce almost 95% of the vehicles, the sales of the rest of the volumes, which are imported, could take a hit due to the lesser valued local currency. In an already tough pricing environment, Volkswagen might look to protect its profitability by scaling up prices of the already premium-priced imported units such as the Audi Q3 and Q5, which presently hold leading positions in the imported SUV market. And speaking of SUVs– that’s where Volkswagen has struggled too. There has been a shift in customer preferences from sedans to SUVs/Crossovers, and this has caught Volkswagen somewhat off-guard. Sales of SUVs are up approximately 45% in China through July, even when the rest of the market crumbles around it. Budget SUVs are the biggest success, and are the primary reason why the domestic manufacturers have seen strong growth in a slow market this year. Other foreign automakers have also had to adjust their strategy in China according to the shifting demand trends. GM’s volume sales in China declined 4% in July, but year-to-date, the sales are up 3.4% over 2014 levels. Around 83% of GM’s China volumes constituted sedans last year, but the company has emphasized  sales of its SUVs, such as the Baojun 560, to gain from the large demand for these larger vehicles. So Volkswagen is not only losing volumes in China due to a slower market, but is also losing share to its competition– both domestic and foreign automakers. And now the currency devaluation means that the imports could suffer. Volkswagen reports the earnings from China as per the equity method, and the weaker renminbi will mean lower revenues for the group when converted to euros. It’s really a trade-off between lowering production levels in China due to the slowing demand, or losing profits due to the unfavorable currency translations. Either way, it isn’t a rosy picture for Volkswagen in China. And given that the country forms over one-third the net vehicle deliveries for the entire group, a group that delivers over 10 million vehicles annually across the globe, the downturn in China and Volkswagen’s weak performance in the country are expected to continue to drag-down the automaker’s financials. See the links below for more information and analysis: Volkswagen’s troubles run deep How premium automakers are faring in a slower Chinese market Volkswagen’s split could be good news Volkswagen: turnaround in the U.S. fortunes? Mercedes-Benz is catching up with competition in China Who will gain most from the large SUV/Crossover demand in the U.S.? Trefis analysis: Volkswagen China and Affiliates Vehicles Sold Trefis analysis: Volkswagen Passenger Cars, SEAT, LCVs Revenues Trefis analysis: Volkswagen Audi Revenues 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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    Time Warner's Efforts In China Are of Little Value To Shareholders
  • By , 8/26/15
  • tags: TWX DIS CMCSA FOX
  • Time Warner’s  (NYSE:TWX) studio, Warner Bros., is reportedly eyeing a partnership with a Chinese studio to produce films for the local market. This comes in as no surprise given the demand for movies in China and the success of various Hollywood films in international markets. Other media houses such as Fox  (NASDAQ:FOX) and Disney  (NYSE:DIS) have already set up joint ventures in international markets, including Europe and India. While China offers a great opportunity for Warner, it will have a limited impact on the company’s stock price due to low value contribution of the box-office business. Having said that, Warner will see steady growth in box-office revenues in the coming years, irrespective of the China deal. This growth will be led by sequels and movies around DC characters and Warner’s other popular franchises. It must be noted that we currently do not price any such acquisition in our price estimate. Warner Bros. is in talks with China Media Capital to set up a joint venture that will produce local language films for the Chinese market, according to The Wall Street Journal. So far, the quantum of investment and the number of movies to be produced in this possible joint venture is not known. There is massive demand for movies in China, evident from the region’s box-office grossing, which grew from a little under $1 billion in 2009 to around $5 billion in 2014. Domestic Chinese films accounted for 55% of this total grossing in 2014, reflecting high demand for regional cinema, which Warner is eyeing. Furthermore, China shares only 25% of the box-office sales with U.S. media companies and this joint venture may be another way around to grab a bigger piece of this fast growing movie market. Another factor behind Warner’s move could be the limited exposure of international movies to China market, which currently allows only 34 foreign films to be released in a year. If we assume a 10% market share for the combined studio in next five years and the overall market grows in high-single-digits, it will translate into revenues of less than $500 million, which will be split between the partners. Here, we assume similar market share of regional movies (55%). With very less revenues to look upon and lower EBITDA margins associated with the segment, due to high distribution costs for the movies, the acquisition will not have any meaningful impact on Time Warner’s stock price. However, the studio itself will see steady growth in the coming years, irrespective of this China deal. Warner’s share in the U.S. box-office has been in the range of 15% to 17% in the past few years. So far, in 2015, the studio has maintained close to 17% market share led by the success of American Sniper, San Andreas, Mad Max: Fury Road and Get Hard.  However, it postponed the release of its much-hyped Batman v Superman movie to 2016. Warner’s global box-office revenues have been hovering around $2 billion for the past few years amid a few hits and misses at the box-office. Going forward, we expect a slight uptick in revenues led by the company’s solid slate of DC movies that will boost its share in the global box-office market . However, we don’t expect any significant growth in the medium term, as the studio will be competing against Disney’s Star Wars and Fox’s Avatar sequels in the coming years. We currently estimate $1.93 billion in box-office revenues and EBITDA of over $300 million for 2015. It must be noted that Warner Bros. earns most of its revenues from production and licensing of TV shows and box-office accounts for less than 3% of Time Warner’s stock valuation. Accordingly, any changes to our forecast will not have a meaningful impact on the company’s stock price (see – HBO And Warner Bros. Will Drive Time Warner’s Future Growth ). See our complete analysis for Time Warner 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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    Best Buy Surprises With Strong Sales Growth And Margin Improvement; Will Continue To Invest In Stores-Within-A-Store Format
  • By , 8/26/15
  • tags: BBY
  • Best Buy (NYSE:BBY) recently released its financial results for the quarter ended August 1, 2015. To everybody’s surprise, this quarter’s performance was in sharp contrast with that of the previous quarter, when sales stayed flat year-over-year and the bottom line fell due to one-time charges. As the company exceeded expectations on both revenues and profit this time around, the stock jumped by as much as 15% following the results. Comparable sales increased 3.8% compared to a 2% decline during the same period last year and operating margin improved from 2.7% to 3.4%. While sales benefited from growth in the large TV category, margins improved due to a better product mix and cost savings from consolidation in Canada. The outlook for the rest of the fiscal also looks positive as consumer confidence (a leading indicator of consumer spending) in the US continues to improve. Below,  we take a closer look at some of the factors discussed above and also discuss the key forces that, we believe, will drive Best Buy’s growth ahead.  Our price estimate for Best Buy  currently stands at $36, which is about 10% above the current market price. Better Than Expected Retention in Canada Stores Earlier in March, Best Buy announced that it would close 66 Future Shop locations and re-brand the remaining 65 Future Shop stores under the Best Buy brand. The company saw an opportunity to cut down operating costs as it discovered that a significant number of its Future Shop and Best Buy stores were located adjacent to each other, often in the same parking lot. But, the cost reductions came at the risk of losing sales from the closed stores (net of retained sales). However, it turned out that the remodeled stores retained higher-than-expected sales, which meant that Best Buy could generate more sales than before in the remodeled stores, but at the same operating cost. This partially contributed to the 70 basis point improvement in the operating margin to 3.4%, which is almost twice the average operating margin seen in the last five quarters (i.e. 1.8%). Increasing Complexity of Technology Products Will Benefit Best Buy The company is strengthening its position in growing categories, such as appliances, by expanding its store-within-a-store format. Best Buy began rolling out the Samsung Appliance Experience centers in its stores and the company expects to roll out approximately 225 Samsung Open Houses (dedicated in-store display of Samsung appliances) by the end of the year. Other additions made during this quarter include home theater stores-within-a-store from Samsung and Sony. Best Buy continues to invest in these store formats despite focusing on cost reductions elsewhere. This doesn’t come as a surprise because appliances is the fastest growing category at Best Buy and also offers better margins than most consumer electronics categories. In the recently concluded quarter, the appliances category grew by more than 20.7%, accelerating from an 8% growth in the same period an year ago. As the complexity and interoperability of technology products increases, product categories such as connected homes and health and wearables are seeing momentum. These trends make Best Buy’s click-and-mortar model increasingly relevant compared to pure online competitors such as Amazon. View Interactive Institutional Research (Powered by Tref is):
    ORCL Logo
    Oracle’s Cloud Strategy: If You Can’t Beat Them, Buy Them
  • By , 8/26/15
  • tags: ORCL ADBE CRM SAP
  • Global software behemoth Oracle Corp. (NYSE:ORCL) is continuing its trigger-happy acquisition strategy with the purchase of Maxymiser, a marketing cloud company, for an undisclosed sum. Maxymiser is a leading Cloud software that enables advertisers to optimize  ad content placed in individual browsers so as to maximize user engagement. Being a relatively late entrant to the cloud computing market, Oracle opted to augment organic development through a lengthy series of acquisitions to fuel growth. Consequently, it has been using a large portion of its annual cash flow for acquiring private cloud computing companies over the last three years. Now, with the acquisition of Maxymiser, Oracle hopes to catch up to marketing cloud leader Adobe (NYSE: ADBE). Our price estimate of $42 for Oracle Corp. is nearly 20% higher than its current market price. See our complete analysis for Oracle Corp. here Acquisitions Not at Odds With Shareholders’ Value Between fiscal 2013 and 2015, Oracle spent over $7 billion in acquisitions, almost all of which was in cash. To put it in perspective, the amount Oracle spent on acquisitions forms over 15% of its cumulative cash flow from operations over the three fiscal years. The company has not disclosed whether these acquisitions, or any part thereof, were funded by debt. Nevertheless, Oracle’s Debt-to-EBITDA ratio has increased from 1.1x in fiscal 2013 to fiscal 1.8x in 2015. To be fair, Oracle cannot be accused of ignoring shareholder value to fund its acquisition spree. Over the same period of three years, Oracle has returned a cumulative $35 billion in cash to shareholders in the form of share repurchases and dividends, which is a truly bountiful 80% of its cash flow from operations. Therefore, Oracle’s use of cash for its acquisitions may be said to be judicious as far as returns to shareholders are concerned. Faster Integration of Acquired Companies Key to Gaining Ground Whether Oracle’s acquisitions are value-accretive depends upon the purchase price and their successful integration with Oracle’s broader product portfolio. The company did not disclose the purchase price for acquiring Maxymiser. The latter is estimated to have annual revenues of $30 million, so the price is likely to be insignificant. The acquisition thus seems like a technology “tuck-in” intended to firm Oracle’s broader offering.  Thus in this case, the success or failure of the acquisition will depend upon rapid integration of Maxymiser’s capabilities in Oracle’s Marketing Cloud offerings. Oracle has been accused of slow integration of its acquisitions in the past, which could widen the gap against rivals like Adobe and Salesforce.com (NYSE:CRM). Even as Oracle struggles to catch up in the cloud computing market, its competitors are already moving on to the next big thing. (Read: Salesforce Eyeing Expansion Into Industry Verticals as Q2 Revenues Beat Expectations ) The Marketing Cloud market is estimated to be worth $10 billion and certainly has significant untapped potential. But in the long run, we believe that Oracle needs to return to paving the way as it did in the Database software industry in the past, rather than following the herd in the cloud computing industry. Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research
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    The Potential Impact Of An Upward Revision In Silver Wheaton's Effective Tax Rate
  • By , 8/26/15
  • tags: SLW ABX NEM FCX VALE
  • Silver Wheaton  (NYSE:SLW) received a proposal letter from the Canada Revenue Agency (CRA) last month, in which the CRA proposed to reassess the company’s tax liability for the years 2005-2010. As per the CRA, under the transfer pricing provisions of the Income Tax Act (Canada) pertaining to the income earned by the company’s subsidiaries located outside Canada, the company’s income subject to taxation in Canada should be increased by US $567 million for the years 2005 to 2010. Essentially, the CRA proposes to tax the income earned by Silver Wheaton’s foreign subsidiaries at the rates of income tax applicable within Canada for the years 2005-2010. Most of the company’s income generating activities are conducted by Silver Wheaton (Caymans) Ltd., which operates in the Cayman Islands and is not subject to income tax. If the CRA’s proposed reassessment materializes, the company could be subject to additional taxes totaling $150 million and penalties totaling $57 million for the years 2005-2010. The uncertainty caused by a potential CRA reassessment has negatively impacted Silver Wheaton’s stock price, which has fallen nearly 29% to date since the receipt of the CRA letter by the company on July 6. The company management is confident that Silver Wheaton remains in compliance with all relevant tax provisions as per Canadian law. However, a point of concern for Silver Wheaton is if the CRA determines that the income from the company’s foreign subsidiaries is taxable at Canadian tax rates going forward. A major contributing factor to the success of Silver Wheaton’s high margin streaming business is the low tax burden because of its existing corporate structure and the low applicable taxes. If the CRA decides that higher taxes will be applicable on the company’s entire income going forward, it could have a major negative impact on the company’s valuation. Though Silver Wheaton has not yet received any notification of such a proposal from the CRA, we will explore the impact of such a scenario on the company’s stock price. Impact of a Change in Tax Rate on Silver Wheaton’s Stock Price As per Silver Wheaton’s SEC filings, the company’s income in Canada is subject to provincial and federal tax rates of 26%. However, since nearly all of Silver Wheaton’s income is subject to taxation in the Cayman Islands, the company has a very low tax burden. This is reflected in the effective tax rate assumptions currently factored into our model. See our forecasts for Silver Wheaton’s effective tax rate If a scenario materializes in which Silver Wheaton’s entire income is subject to a higher tax rate of 26%, the company’s stock price would fall significantly. If we factor in a 26% effective income tax rate starting in 2016, our price estimate for the company’s stock declines by 28% to $12.02. Thus, an upward revision in the company’s effective tax rate would certainly have a major negative impact on the company’s stock price. From Silver Wheaton’s point of view, the company would certainly be hoping that this scenario does not materialize. See our complete analysis for this scenario here 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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    BlackRock's Plans To Finance Rental-Home Investors Should Help Alternative Investment Arm
  • By , 8/26/15
  • tags: BLK
  • BlackRock (NYSE:BLK) appears keen to grab a share of the rapidly growing rental-home financing industry, and will reportedly venture into the industry through several lending partners over the coming months. This move hardly comes as a surprise given the steady increase in the number of Wall Street firms and specialized lenders that have shown an interest in the lucrative home rental market over recent years. BlackRock has been pursuing an aggressive growth strategy in the real estate and infrastructure investment space, and the latest decision could unlock considerable long-term value for the company’s alternative investment business.
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