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The Dow Chemical Company Logo
  • commented 7/7/15
  • tags: DOW
  • Chlorine Market: Global Industry Analysis and Opportunity Assessment 2015-2025 by Future Market Insights

    Chlorine is known as a very important industrial chemical and is used in half of the world's commercial chemical industries. Chlorine is a greenish yellow gas and is characterized by reactive nature and high expansion potential. This element turns into solid at -103°C (-153°F) and into liquid at -34°C (-29°F). Chlorine market is expected to see a surge in demand due to increasing applications such as bleaching of wood pulp during paper productions.

    As reported by the World Chlorine Council (WCC), around 60 million metric tons of chlorine is produced every year across the world.

    Chlorine Market: Drivers & Restraints
    The demand for global chlorine market is projected to show significant growth during the forecast period 2015-2020 owing to its usage in several industries such as paper and pulp industry, chemical industry, plastic industry, water treatment industry, pharmaceutical industry and many other.

    Browse Full Report@ http://www.futuremarketinsights.com/reports/details/chlorine-market

    Furthermore, 98% of water treatment plants and 85% of pharmaceutical industries in the world use chlorine in production processes. Hence, increase of water treatment and pharmaceutical industries all over the world and their demand for chlorine, anticipated to boost the global chlorine market during the forecast period.

    Nevertheless, the risk of handling and transporting chlorine due its highly combustive nature is an obstacle for global chlorine market. In Addition, rising environmental concerns such as depletion of the upper atmosphere ozone layer from several prominent end uses for chlorine have affected demand for the product.

    Chlorine Market: Segmentation
    The Global Chlorine Market is broadly classified into seven segments on the basis of end use industries
    • Water Treatment industry
    • Pharmaceutical industry
    • Chemical Industry
    • Paper and pulp Industry
    • Plastic Industry
    • Pesticides industry
    • Others

    The Global Chlorine Market is broadly classified into eight segments on the basis of applications
    • Ethylene Dichloride (EDC)/Polyvinyl Chloride (PVC)
    • Organic chemicals
    • Inorganic chemicals
    • Chlorinated intermediaries
    • C1/C2 Aromatics
    • Isocyanates
    • Propylene Oxide
    • Others

    The Global Chlorine Market is broadly classified into four segments on the basis of production methods
    • Mercury Cell Process
    • Membrane Cell Process
    • Diaphragm Process
    • Others

    Chlorine Market: Regional Outlook
    By geography global chlorine market is segmented into seven key regions: North America, South America, Eastern Europe, Western Europe, Asia Pacific, Japan, and Middle East & Africa. Asia Pacific region is expected to be the fastest growing market due to increasing plastic and chemical industries in emerging economies such as China and India, in this region. After Asia Pacific, Western Europe region is anticipated to show significant growth during the forecast period 2015-2020 owing to the pharmaceutical and chemical industry growth in this region and their growing consumption of chlorine. Booming water treatment and plastic industries in North America region are projected to drive the global chlorine market during forecast period.

    Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-gb-591

    Chlorine Market: Key Players
    The key market players operating in Global Chlorine Market are Occidental Petroleum Corporation (U.S.), The Dow Chemical Company (U.S.), Tata Chemicals Limited (India), BASF SE (Germany), Hanwha Chemical Corporation (Korea), Ineos Group Ltd. (U.K.), Tosoh Corporation (Japan), PPG Industries (U.S.), Formosa Plastics Corporation (Taiwan), Olin Corporation (U.S.) and others.
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    Chlorine Market: Global Industry Analysis and Opportunity Assessment 2015-2025 by Future Market Insights Chlorine is known as a very important industrial chemical and is used in half of the world's commercial chemical industries. Chlorine is a greenish yellow gas and is characterized by reactive nature and high expansion potential. This element turns into solid at -103°C (-153°F) and into liquid at -34°C (-29°F). Chlorine market is expected to see a surge in demand due to increasing applications such as bleaching of wood pulp during paper productions. As reported by the World Chlorine Council (WCC), around 60 million metric tons of chlorine is produced every year across the world. Chlorine Market: Drivers & Restraints The demand for global chlorine market is projected to show significant growth during the forecast period 2015-2020 owing to its usage in several industries such as paper and pulp industry, chemical industry, plastic industry, water treatment industry, pharmaceutical industry and many other. Browse Full Report@ http://www.futuremarketinsights.com/reports/details/chlorine-market Furthermore, 98% of water treatment plants and 85% of pharmaceutical industries in the world use chlorine in production processes. Hence, increase of water treatment and pharmaceutical industries all over the world and their demand for chlorine, anticipated to boost the global chlorine market during the forecast period. Nevertheless, the risk of handling and transporting chlorine due its highly combustive nature is an obstacle for global chlorine market. In Addition, rising environmental concerns such as depletion of the upper atmosphere ozone layer from several prominent end uses for chlorine have affected demand for the product. Chlorine Market: Segmentation The Global Chlorine Market is broadly classified into seven segments on the basis of end use industries • Water Treatment industry • Pharmaceutical industry • Chemical Industry • Paper and pulp Industry • Plastic Industry • Pesticides industry • Others The Global Chlorine Market is broadly classified into eight segments on the basis of applications • Ethylene Dichloride (EDC)/Polyvinyl Chloride (PVC) • Organic chemicals • Inorganic chemicals • Chlorinated intermediaries • C1/C2 Aromatics • Isocyanates • Propylene Oxide • Others The Global Chlorine Market is broadly classified into four segments on the basis of production methods • Mercury Cell Process • Membrane Cell Process • Diaphragm Process • Others Chlorine Market: Regional Outlook By geography global chlorine market is segmented into seven key regions: North America, South America, Eastern Europe, Western Europe, Asia Pacific, Japan, and Middle East & Africa. Asia Pacific region is expected to be the fastest growing market due to increasing plastic and chemical industries in emerging economies such as China and India, in this region. After Asia Pacific, Western Europe region is anticipated to show significant growth during the forecast period 2015-2020 owing to the pharmaceutical and chemical industry growth in this region and their growing consumption of chlorine. Booming water treatment and plastic industries in North America region are projected to drive the global chlorine market during forecast period. Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-gb-591 Chlorine Market: Key Players The key market players operating in Global Chlorine Market are Occidental Petroleum Corporation (U.S.), The Dow Chemical Company (U.S.), Tata Chemicals Limited (India), BASF SE (Germany), Hanwha Chemical Corporation (Korea), Ineos Group Ltd. (U.K.), Tosoh Corporation (Japan), PPG Industries (U.S.), Formosa Plastics Corporation (Taiwan), Olin Corporation (U.S.) and others.
    BP Logo
    How Does The Settlement Agreement Impact BP's Valuation?
  • By , 7/6/15
  • tags: BP XOM RDSA CVX PBR
  • UnitedHealth Group Logo
  • commented 7/6/15
  • tags: UNH
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    TXN Logo
    Texas Instruments Launches Lowest Power RF Synthesizer, Enhancing Its Offering
  • By , 7/6/15
  • tags: TXN BRCM INTC AMD
  • Texas Instruments (NASDAQ:TXN) has recently launched LMX2571, the industry’s most power efficient wideband radio frequency (RF) synthesizer. The LMX2571 RF synthesizer is available for purchase in a 6 mm X 6 mm quad flat no-leads (QNF) package at $5.50 in 1,000-unit quantities. The LMX2571 enhances radio sensitivity and dynamic range for applications like low-power wireless communication, handheld oscilloscopes and signal analyzers. An integrated frequency modulator enables user to directly modulate the carrier to produce analog frequency modulation or frequency-shift-keying for land mobile radios, software-defined radios and wireless microphones. Other features include an integrated feature to remove integer boundary spurs; integration of low-dropout regulators, a 5-V pump, and a fast transmit/receive switch reduces bill of materials and solution footprint. Since its exit from the smartphone and tablet market in September 2012, TI has transitioned its operations to become a pure analog and embedded processing company. Its embedded division includes processors, microcontrollers, and connectivity products, which account for approximately 50%, 45% and 5% of its embedded revenue, respectively. While TI has a leading market share in processors, the company is still relatively under-represented (~6% market share) in the microcontroller space. The LMX2571 is the first RF synthesizer in the industry with an integrated feature to remove integer boundary spurs (IBS), allowing designers to eliminate spurious emissions and maximize use of radio channels in their wireless systems. The launch will enhance TI’s differentiated product pipeline and is expected to improve market share for TI, thereby boosting revenues. However, Texas Instruments operates in an intensely competitive industry and companies such as Analog Devices can pose stiff competition. TI accounts for over 18% of the analog market. With the acquisition of National Semiconductor, a strengthening product portfolio and growth in high volume analog and logic segments, we believe that the company is well equipped to leverage increasing demand for analog products. TI’s analog product portfolio consists of high volume analog & logic, high-performance analog and power management circuits. It caters to over 80,000 customers from various industries such as computing, wireless communication, infrastructure, automotive, telecom, etc. TI is the market leader in voltage regulators, which is expected to be a strong growth driver for the analog market. The segment contributes around 30% to TI’s total analog division revenue. TI plans to reduce costs in certain embedded processing product lines that either have matured or do not offer the return opportunities the company is looking for. The company has clarified that is does not plan to exit any market or discontinue any existing embedded products, but is simply realigning its resources to better cater to market opportunities. It expects the ongoing changes to improve the profit margin in embedded business while still maintaining its pace of growth. Our price estimate of $50 for TI is at an approximate 7% discount to the current market price. See our complete analysis of Texas Instruments here View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    DIS Logo
    Weekly Media Notes: Disney's Consumer Products And Interactive Merger, CBS-AT&T Carriage Deal And More
  • By , 7/6/15
  • tags: FOX CBS T
  • The media industry remained active last week, with Disney merging its consumer products and interactive media division. In another development, Fox inked a deal with Lee Daniels to develop more programming for the media giant . In yet another, CBS and AT&T reached an agreement for carriage of CBS’ networks on U-verse. On that note, we discuss below these developments related to media companies over the last week or so.
    GE Logo
    GE-Alstom Deal: GE Willing To Make Concessions As EU Commission Raises Antitrust Concerns
  • By , 7/6/15
  • tags: GE
  • General Electric (NYSE:GE) recently received a list of competitive concerns from the EU Commission pertaining to the company’s acquisition of majority of Alstom’s energy business. The intent to acquire the business was confirmed last year in an announcement when Alstom’s board unanimously picked GE’s bid for majority of its power and grid businesses for an enterprise value of $13.5 billion . The EU Commission is now raising concerns about the impact this deal would have on the competition within the industry. The commission is concerned that upon the completion of this deal only two strong competitors, General Electric and Siemens, will remain in the industry in Europe. General Electric is currently contemplating the concessions it could make to make this deal go through. It is important to note that the EU Commission sending a list of concerns to an acquiring company is standard procedure and doesn’t necessarily mean that the deal will be blocked from going through. The final result of the deal will be largely dependent on the steps General Electric takes to address the Commission’s concerns. This deal is an important step for GE in strengthening its industrial portfolio as it  divests majority of its financial services business . We currently have a price estimate of $27.81 for GE’s shares, approximately in line with its current market price. See our complete analysis for General Electric There are several factors that make this deal an important win for GE. These include the existence of complementary technologies between the two companies, the opportunity for improved joint capabilities and big cost synergies. In a presentation made in May, GE quantified the synergies created by the Alstom deal. The company anticipates an additional $1.8 billion in cost savings by this deal, over the $1.2 billion estimated in May 2014. Over 40% of the additional cost savings is expected to come from SG&A consolidation due to this deal. Another 40% is expected to be derived from improved manufacturing capabilities with the merger of Alstom’s Power and Grid businesses with GE. The remaining 20% is expected to be derived from better utilization of technical resources and better run services. The good news for investors lie in the impact these cost synergies are expected to have on GE’s EPS in the future. The company forecasts its EPS to move from $.06-$.09 in 2016 to $.15-$.20 in 2018. These numbers put into perspective GE’s eagerness to defend the deal and consequently make concessions to eliminate the EU Commissions concerns that could potentially block the deal. However, the company will be reluctant to take up concessions that dilute the value-addition brought about by this deal. GE’s CEO has expressed the company’s willingness to sell off intellectual property to address the Commissions concerns, but has made it clear that concessions around Alstom’s service business was not something GE was willing to do. GE has already pledged to create 1,000 engineering and manufacturing jobs in France, besides maintaining certain production lines in France along with supporting Alstom’s high-speed rail unit in France to placate the French government’s concerns about the merger. GE and Alstom have two months to reach a compromise with the EU Commission, which has a deadline of August 21st, 2015 to give its final word on this merger. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research
    TWC Logo
    Weekly Pay-TV Notes: Court Sets Accelerated Net Neutrality Complaints Timeline, Comcast’s NBC Loses Miss USA and Miss Universe
  • By , 7/6/15
  • tags: TWC CMCSA T VZ
  • The pay-TV industry saw significant activity this week, with an Appeals Court setting an accelerated timeline for reviewing net neutrality complaints by the Internet service providers (ISPs). As the controversial net neutrality rules have now taken effect, the ISPs are in danger of being prosecuted under them. Consequently, the ISPs want the court to resolve the matter quickly and an accelerated schedule comes as good news. The FCC’s decision to regulate the Internet like a utility could ultimately lead to the commission controlling the tariffs charged to the end user, leading to a loss in revenues for the ISPs. As pay-TV revenues are already declining, a potential stagnation in Internet revenues will be immensely damaging. In other news, Comcast’s NBC will not be able to broadcast the Miss USA and Miss Universe contests after it terminated its business relationship with Donald Trump. These are two of the biggest events in the beauty pageant industry and NBC will find it difficult to find suitable replacements in the same genre.
    WAG Logo
    Here Are Three Factors That Can Have A Sizeable Impact On Walgreens' Stock Price
  • By , 7/6/15
  • tags: WAG CVS RAD
  • In the last year or two, the U.S. healthcare industry has seen a lot of changes. Government initiatives such as ObamaCare brought in more people under insurance coverage, expanding the addressable market for firms in this industry. At the same time, therapy costs are scaling new heights with the emergence of specialty therapies targeted at very rare conditions, driving healthcare expenditure up.  Walgreens (NASDAQ:WBA) in itself, as a company, has made significant changes to the way it operates to increase efficiencies. As drug costs shot up, it changed the way it procures drugs by shifting from self-managed warehouses to an outsourced model. More importantly, it took the less traveled path of staying within its core business (pharmacy retail), unlike competitors such as  CVS Health (NYSE: CVS), who expanded into the benefits management business. Walgreens expanded globally by acquiring its European counterpart, Alliance Boots, to form the first global pharmacy-led health and well-being enterprise. Amid a multitude of events and factors transforming the industry, it is key for investors to understand how they could affect companies of their interest. In this article, we discuss three such factors influencing Walgreens and quantify their likely effect on its stock price. Note that the potential upside or downside is indicated in parentheses beside each factor. Our current  price estimate for Walgreens  is $70, which is at a discount of about 20% to the market price. View our analysis for Walgreens If Payers Design New Formulary Tiers (+10%) For some time now, both consumers and drug retailers have been plagued by soaring generic drug prices . Adding to the misery of drugstores, payers have kept  reimbursement rates flat, which has led to significant losses for most drug retailers. The primary motive behind Walgreens’ decision to outsource its distribution process to Amerisourcebergen was to hedge the risks arising from the above discussed trends. While this helped the company avoid losses to a certain extent, more help is on its way from payers. The amount that retailers get reimbursed from payers varies with the type of drug. Branded drugs, specialty therapies and generics are usually separated into different tiers, each of them having different reimbursement rates (generics usually have a fixed dollar amount). However, with generic price inflation, the disparity between prices within the generics category has increased. According to a study conducted by the Drug Channels Institute, 50% of the drugs, in their survey sample, increased in cost and 50% declined (note that the magnitude of increases was significantly higher than that of decreases). In such a situation, it is necessary to treat each generic drug differently when it comes to reimbursement rates, as one solution for all doesn’t work. Therefore, payers are working on creating a tiered pricing system for generic drugs that would require members to pick up more of the cost. While this pricing system is still in its formative stages, when put into effect, it could reduce drug acquisition costs for pharmacy retailers. Per the current scenario, we expect Walgreens’ EBITDA margin to grow from the current 10% to 11% by the end of our forecast period. However, if the proposed new pricing system is brought into effect, it has the potential to push margins up. Considering a positive impact of 1.5 percentage point increase in the company’s EBITDA margin in the next three fiscal years (FY’16 to FY’18), it translates to a 10% upside to our current price estimate for the company. Higher Pricing Pressure from PBMs Due To Consolidation (-10%) On the other hand, the company’s margins could see some downside, given the consolidation in the PBM market. Among the top three pharmacy retailers in the U.S., Walgreens is the only company which does not have a presence in the pharmacy benefits management business, which the other two competitors entered to battle rising drug costs. While scale has always been on Walgreens’ side, allowing it to negotiate better with PBMs, the balance is likely to now tilt in the latter’s favor, owing to the recent consolidation in the industry. Currently, the top three players in the market control more than 70% of the market. The creation of larger healthcare enterprises means that they have greater bargaining power, which in turn results in greater pricing pressures for drug retailers. This is likely to result in an increase in drug acquisition costs for pharmacies, impacting their profit margins. Considering a negative impact of 1.5 percentage-point decrease in  Walgreens’ EBITDA margin in the next two fiscal years (FY’16 and FY’17), it could result in a 10% downside to our current price estimate. This is more likely than the upside scenario discussed above, in our view, as consolidation has already taken place in the industry and newly-formed larger PBMs will waste no time in using their scale advantage for more favorable contracts with retailers. Loss Of U.S. Prescriptions Share To Competitors With PBMs (-10%) Naturally, drug retailers who have their own benefit management business are shielded from the above discussed risk (greater bargaining power of PBMs) and therefore could pass on higher benefits to consumers than Walgreens can. Promotional campaigns is one way that retailers achieve this to attract higher footfall to their stores, and PBM owning drugstores are better positioned to offer them. As consumers are expected to be increasingly sensitive to out-of-pocket costs (given the increasing drug prices), strategies such as promotional campaigns could turn out to be even more effective in drawing customers to stores. We believe that this will likely impact Walgreens’ share of the total prescriptions filled in the U.S. Per our current estimates, Walgreens’ share of total prescriptions filled in the U.S. will increase from the current level of 22% to 24% by the end of the Trefis forecast period. Of the 2% gain in share predicted, 1.5% gain is expected to be achieved by the end of FY2017. However, with the above discussed trends in the industry, the chances of a gain in market share could be bleak. In fact, a loss in market share is quite a possibility. A 1 percentage-point loss in market share in the next two years (FY’16 and FY’17) translates to a 10% downside to our current price estimate. View Interactive Institutional Research (Powered by Trefis) Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap More Trefis Research
    CMCSA Logo
    Expected Improvement In NBC's Performance Will Reduce Comcast's Risk
  • By , 7/6/15
  • tags: CMCSA DIS CBS FOX
  • The 2014-15 season was bittersweet for Comcast ‘s (NASDAQ:CMCSA) broadcasting network, NBC. The network managed to best rival CBS and retain its number one ranking in the 18-49 adult demo. However, the lack of any freshman hits was disappointing for the network. We believe that NBC can rectify this situation next season, as it has lined up an impressive roster of new shows with a balanced mix of action, comedy and drama. Taking a long-term perspective, we forecast that EBITDA from NBC broadcasting will more than double from $725 million in 2014 to $1.88 billion by 2021. Additionally, NBCUniversal’s filmed entertainment segment has been firing on all cylinders. We believe that sustained growth in broadcasting and filmed entertainment segments will be instrumental in pushing NBCUniversal’s contribution to Comcast’s total EBITDA from below 24% currently to around 30% by the end of our forecast period. NBCUniversal’s importance is growing as the segment is becoming an important growth driver for Comcast in the wake of the company’s saturating pay-TV business. Our price target for Comcast stands at $64.80, implying a premium of around 7% to the market.
    MSFT Logo
    How Does Microsoft Benefit From Exiting Display Ads Business?
  • By , 7/6/15
  • tags: MSFT YHOO GOOG
  • Microsoft (NASDAQ:MSFT) announced on 29th June that it was handing over reins of its display ads business to AOL. Transfer of the display ads business to AOL signifies the struggle Microsoft has had with online display ads business. We believe that Microsoft is systematically dis-investing from non-core and unprofitable business areas to focus on its cloud and hardware products. It stands to benefit from this deal as it can now plough back more resources into its growing search engine Bing. Furthermore, it can leverage AOL’s ecosystem (ads stack and platform) to sell its display ads. In this note, we explore the reason behind the exit and how Microsoft plans to supplement its search ads business to take on Google (NASDAQ:GOOG). See our complete analysis of Microsoft here Microsoft’s Display Ads Vertical Was Struggling Over the past few years, Microsoft’s share of the $89 billion global display advertising market — including online video, banner ads, rich media and sponsorships — has been eroding. Considering the 22.4% growth in global display ads last year, Microsoft’s decline in display ads was considerably steep. eMarketer projected that Microsoft’s share would have declined further had the company not exited the display ads business. eMarketer predicted that Microsoft’s share in the U.S. would have declined to 1.7% this year, down from a 2.2% share in 2014 and a 3.9% share in 2013. Considering that most of the digital display ads budgets were increasingly ear marked toward the leading social network, it made sense for Microsoft to offload its display ads division to AOL, which has emerged as one of the leaders in the display ads industry. Under the terms of the agreement, 1200 employees working in display ads unit will be moving from Microsoft to AOL. Specifics are undisclosed, though Microsoft’s Bing will replace Google Search across AOL’s sites. Investing In Bing’s Search for Success On the other side of the online ad spectrum is Microsoft’s Bing search engine, which has done fairly well over the past few years. Bing’s market share in the U.S. has improved from 15% in January 2014 to over 20.3% in May this year. Microsoft has also been able to make a dent to Google’s dominance by inking deal with Yahoo, which also is the default search engine for Mozilla Firefox. According to eMarketer, Microsoft’s revenue share in the search ads industry is projected to improve from $2.91 billion in 2014 to $3.45 billion in 2015. Microsoft is committed to its search ads business and has signed an exclusive 10-year deal with AOL that will see Microsoft’s Bing replace Google as the search engine providing 100% of the organic search results and search ads when people search on AOL’s sites. The deal would come into effect from Jan. 1, 2016. and target Google’s search dominance. Currently, we project Bing’s market share to increase to 4.2% by 2021. However, as Microsoft is proactively engaging content sites to enlist its Bing search engine as the default service, this share can be significantly higher and search ad revenue for Microsoft can increase. If its share were to increase to 5% by 2019, then it would boost Microsoft’s search ads topline to $6.5 billion. We currently have a  $44.46 price estimate for Microsoft, which is in-line with the current market price. Understand How a Company’s Products Impact its Stock Price at Trefis View Interactive Institutional Research (Powered by Trefis): Global Large Cap  |  U.S. Mid & Small Cap  |  European Large & Mid Cap More Trefis Research
    MGM Logo
    Casino Notes: Macau June Gaming Revenues Plunge 36%
  • By , 7/6/15
  • tags: LVS WYNN
  • Casino stocks surged last week amid relaxed visitation rules in Macau. However, monthly gross gaming revenues were again down 36% for the month of June. Back in the U.S., the Nevada Gaming Control Board recently released data for May gaming revenues, which were up over 3% statewide and 1.3% at the Strip as compared to the prior year period. While the headline figures appear to be low, the numbers are actually very strong given the tough comparison to the prior year period, which saw over 8% jump statewide and over 17% growth at the Strip due to unusual hold levels. On that note, we discuss below some of the key developments in the casino industry over the past week or so.
    F Logo
    Another Look: Some Facts Investors Might Have Missed In Ford's May Sales Numbers
  • By , 7/6/15
  • tags: F GM TM HMC
  • Ford Motors (NYSE:F) reported a 1.3% year-over-year drop in sales for the month of May. The numbers might have disappointed investors especially as U.S. auto sales for May 2015 reached an Seasonally Annual Adjusted Rate of 17.7 million and a 1.3% year-over-year increase in unit sales on the back of a Memorial Day Holiday and a five-weekend month. However, there are some important details that investors might have overlooked when considering the reported numbers from Ford. In this note, we take a look at those details. We have a $14  price estimate for Ford, which is slightly lower than the current market price. F-Series Ford’s F-150 series of trucks has been the best selling model in the U.S. for multiple decades now. Last year, the company decided to do a changeover of the model. Previously manufactured with steel bodies, the new model will be made out of aluminum. The thinking behind this move was that as aluminum is lighter than steel it would allow the company to make more fuel-efficient and easier to handle trucks. Ford makes the F-150 series of trucks at two factories — one in Dearborn, Michigan, and another in Kansas City. The two factories were closed down to install tooling for the launch of the 2015 version and a reasonable estimate can be made of having lost 100,000 units in sales because of the long shutdowns. The Michigan plant began production again in November last year, while the Kansas City plant started in March. But the two factories are still not operating at full capacity. As a result, dealerships are running shop with inventory lower than full capacity. According to Ford management, a pickup truck on average spends 50-60 days in inventory at a dealership, but the popularity of the F-150 trucks in the U.S. has meant that each existing stock unit is spending around 25 days in inventory. In order to maximize profit, the company prioritized retail sales, which fetch higher margins, over commercial sales. The auto maker posted high single digit year-over-year gain in retail sales for March-May period. From Ford’s perspective, this strategy makes sense. While supplies are low, it makes sense to sell to retail buyers who prefer higher-trim trucks than commercial buyers buying for their fleets. But commercial sales are a big part of Ford’s business around F-150, and it lost  out to GM on that front. In the month of May, Ford reported just under 62,000 unit sales of the F-150 trucks. This was lower than the combined sales of GM’s Chevrolet Silverado and GMC Sierra trucks, which came in at just over 70,000. It looks like the combined sales of these two trucks will outpace Ford’s F-150 sales for the first time in five years. This is highly significant, since the F-150 is the most profitable vehicle for Ford and raises the question of how soon the company can reach full production levels and start to regain market share. Smaller Summer Shutdown This is why the company has decided to shorten the standard summer shutdown for its North American assembly plants from two weeks to one week. The one week reduction could help Ford raise production levels by around 40,000 units. The majority of these units will be full-size trucks and popular SUVs/utilities. In addition to Ford’s F-150 trucks only spending around 25 days in inventory compared to the 60 day industry average, inventory levels of the Ford Edge and Ford Escape have also been light. The former has been spending only 13 days on average in dealership lots. The increased supply can help reverse these trends somewhat. Higher Transaction Prices Even though, F-150 sales have been lower than usual, each unit is raking in more money than usual. The average selling price of an F-150 truck for the month of May stood at $43,000, close to 7% higher than compared to a year ago. The figure is also a record high for the truck. One reason for the higher transaction prices is that the truck’s premium trim packages are selling extremely well. For the month of May, nearly two-thirds of F-150 units sold via the retail channel were premium models, a rate that compares very favorably with the historical sales mix of the F-150. See full analysis for Ford Motors 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 Shanghai Project Will Drive International Resort And Theme Park Operations In Coming Years
  • By , 7/6/15
  • tags: DIS CMCSA TWX VIA
  • Disney’s  (NYSE:DIS) international resorts and theme park operations have seen slower growth in the past few years. Disney’s international parks and resorts are located in Paris, Hong Kong, Shanghai and Japan. Looking at the hotel side, the performance of a property primarily depends on two factors, occupancy rate and average per room spending. Disney has seen steady growth in room spending over the past few years led by a recovery in Europe and strength in Asian economies. However, the occupancy rates have declined since the recessionary period. While we expect occupancy levels to marginally improve from the current levels, room spending will continue to grow at a steady pace in the coming years. Looking at the international theme parks, revenues have grown at an average annual rate of 5% in the past few years. However, we expect strong growth on this front as the company opens its Shanghai resort in 2016. On that note, we discuss below the trends in Disney’s international theme parks and hotel operations and what will drive its growth in the coming years. We estimate revenues of around $52.65 billion for Disney in 2015 and EPS of $4.90, which is in line with the market consensus of $4.46-$5.08, compiled by Thomson Reuters. We currently have  a $105 price estimate for Disney’s  shares, which is more than 5% below the current market price of $114. Understand How a Company’s Products Impact its Stock Price at Trefis Trends In Disney’s International Resorts And Theme Park Operations And Our Forecasts Disney offers around 2.50 million room nights in its international properties. The occupancy levels at these properties have declined from 87% to 79% between 2010 and 2014. Looking at the guest spend, it has been on an uptrend and grew from $272 to $322 during the same period. However, declining occupancy levels weighed over the hotel revenues, which grew at an average annual rate of around 2% from $0.58 billion in 2010 to $0.62 billion in 2014. Going forward, we expect the occupancy rates to improve marginally from the current levels and average guest spend to grow to around $400 levels by the end of our forecast period. This will translate into hotel revenues of a little under $1 billion. Looking at the theme parks, the performance has been better as compared to the hotel operations. The international theme parks revenues have grown at an average annual rate of 5% from $1.80 billion in 2010 to $2.15 billion in 2014. We expect strong growth in this segment and estimate the theme parks revenues to be north of $3.30 billion by the end of our five- to seven-year forecast period. This will translate into overall revenues of $4.25 billion for Disney’s international theme parks and resort operations. An estimated  EBITDA margin of 34%  for Disney’s hotel and parks will translate into EBITDA of $1.45 billion, representing around 5% of the company-wide EBITDA. The contribution will be much higher if we include Disney’s U.S. theme parks and hotel operations, which we label as a separate segment in our model. What Will Drive This Growth? We believe that the Shanghai resort will drive much of the growth for Disney’s international resorts and theme park operations. The $5.5 billion resort project will be spread across 963 acres in Pudong, Shanghai. It will offer 2 hotel properties and various dining and entertainment options along with the theme park. Disney will own 43% of the resort while the remaining 57% will be owned by the Shanghai Shendi Group. Disney has been aggressively expanding in China, betting on its buoying middle class. There has been massive demand for Hollywood movies and characters in China, and it is also one of the biggest markets for various studios. The company also opened its largest retail store in Shanghai recently and received a stellar response to the store opening with customers queued up to a mile outside the store. This reflects the popularity of Disney in China and a theme park will only strengthen the brand in the region. The theme parks business is of immense importance to Disney as it generates stable cash flows for the company and also provides a platform to sell and cross-market its other products and services, including movies, retail merchandise and television. The new theme park will thus aid the company’s other ventures such as gaming, movies and merchandise in China. China has become an important market for various U.S. based retailers, media companies and all consumption related players, given its size and sustained growth in income levels. The country has been able to sustain growth as a result of rising income levels and increasing urbanization. This can be primarily attributed to the increase in disposable income driven by a substantial rise in labor costs. The disposable income per capita has more than doubled since 2008. The chart below, complied by Trading Economics, shows the growth in China’s personal disposable income since 2006. The Chinese government itself has been focusing on streamlining the economy towards consumption. These factors have resulted in rapid growth in China’s retail industry as well as demand for entertainment and travel. Accordingly, we believe Disney’s resort and theme park operations will benefit from this growth and drive the segment revenues in the coming years. 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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    Qlik’s Strategy Of Improving Enterprise-Grade Capabilities Is Starting To Pay Off
  • By , 7/6/15
  • tags: QLIK-BY-COMPANY QLIK DATA SAP ORCL
  • Qlik Technologies (NASDAQ:QLIK) is an innovative Business Intelligence (BI) software company, which provides its clients with tools and interactive dashboards to search, query, analyze and visualize chunks of data to generate useful business insights. The company has focused on enhancing its enterprise-grade capabilities in the recent past and is beginning to reap rewards in the form of data-heavy clients such as the National Collegiate Athletic Association (NCAA). Our price estimate for Qlik stands at $33.01, implying a discount of about 5% to the market.
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    Qualcomm Targets The Internet of Things Sector Full Force
  • By , 7/6/15
  • tags: QCOM INTC AMD BRCM
  • Leading mobile chipmaker  Qualcomm  (NASDAQ:QCOM) recently provided guidance on how big the Internet of Things (IoT) sector is for the company. The company said it made $1 billion in revenue last year on chips used in a variety of city infrastructure projects, home appliance, cars and wearables. There were 120 million smart home devices shipped with Qualcomm chips in them last year. In addition, there are 20 million cars equipped with its chips, and Qualcomm silicon is used in 20 types of wearable devices. Even though the company makes the most money selling the wireless chips and processors for a large share of the smartphone market, it expects about 10% of its chip division revenue to come from non-smartphone devices in 2015. In the semiconductor and telecom industries, along with Qualcomm, other major IoT players are AT&T, Cisco, ARM Holdings, Intel, and Samsung Electronics. Qualcomm doesn’t break out its IoT revenue (like Intel does) so we don’t know the precise size of the company’s IoT offering right now. But that doesn’t mean it’s not positioning itself in the space In this article, we discuss the growth potential of the IoT segment and how Qualcomm is adapting its business model to accommodate this major trend. Our price estimate of $71 for Qualcomm is marginally higher than the current market price. A Perspective On The Internet Of Things: Sizing Up The Opportunity As broadband Internet becomes more widely available, the cost of connecting things is decreasing.  More devices are being created with wifi capabilities and censors built into them, technology costs are going down, and smart phone penetration is sky-rocketing. All of these things are creating a “perfect storm” for the IoT segment. Simply put, IoT is the concept of basically connecting any device with an on and off switch to the Internet and, by extension, to each other. This includes everything from coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of. This also applies to components of machines. The IoT revolves around increased machine-to-machine communication; it’s built on cloud computing and networks of data-gathering sensors.  It offers mobile, virtual, and instantaneous connection. The global IoT market is expected to grow by more than $5 trillion over the next six years, according to research firm International Data Corporation (IDC). IDC estimates the global IoT market will reach $7.1 trillion by 2020, as people around the world — and particularly in developed nations — develop an affinity for full-time connectivity. Economic value-add (which represents the aggregate benefits that businesses derive through the sale and usage of IoT technology) is forecast to amount to $1.9 trillion across sectors by 2020. The verticals that are leading IoT’s adoption are manufacturing (15%), healthcare (15%) and insurance (11%). For semiconductor companies, IoT is a high-volume, low-revenue opportunity. Since, the competition is high, as almost all the companies are looking forward to this new segment, the price war is anticipated. Companies would be playing on the volumes by collaborating with high end brands and customizing them accordingly. To grow and increase their share of the IoT opportunity, chip companies will have to differentiate their product offerings. IoT will therefore drive product marketing managers in the semiconductor industry to focus on innovation targeting end product features and on new ways to sell as the primary means to differentiate their offerings targeting the IoT market. Qualcomm Marches Forward Into The Internet Of Everything The largest growth opportunity for Qualcomm over the next five to ten years is in the IoT segment, in the company’s view. We believe that Qualcomm is positioned advantageously to profit from this emerging industry.  Consider our reasoning as follows:  Qualcomm has made strides to leverage the  Internet-of-Everything (IoE) by implementing its technologies in automobiles, homes, cities, wearables, and integrated devices. The company  acquired Cambridge Silicon Radio (CSR) in 2014 for $2.5 billion. It is a UK-based semiconductor company that makes Bluetooth and wireless radio frequency devices (i.e., radios)  for machine-to-machine communication. This acquisition is expected to drive the Qualcomm’s growth by 8% to 10% in the coming years by fortifying its position in providing critical solutions for the IoT market.  Qualcomm is using much of the same technology it puts into phones in IoT devices. It’s modifying its Snapdragon processors for mobile phones, for example, for use in automobiles and smartwatches. To date, the company has invested a total of $33 billion in research and development aiming to bring together technologies. Within IoT, the company is looking to connect everything from wearables and cars to lightbulbs and health care devices. Qualcomm is beefing up its own IoE tech industry partner ecosystem with six new integrations for cloud and software services. Among them are LogMeIn’s Xively, an Internet of Things platform catering to enterprises building connected products, and Proximetry, an IoT performance management provider. It makes sense that Qualcomm commands so dominant a position in the market, given its strengths in wireless communications. The company holds a large share of global wireless baseband revenue, and it only seems natural to parlay its strong wireless chip business into IoT. Last year Qualcomm turned over its AllJoyn protocol to the Linux Foundation and set up the AllSeen Alliance. The basis of the alliance is for tech companies to use the standards Qualcomm created with AllJoyn to allow different companies to connect their IoT devices to each other. The alliance includes 50 companies in all right now. Hardware competition among manufacturers preparing IoT products will be fierce, so Qualcomm will have a number of competitors to deal with in the coming years. Unlike the smartphone market where Qualcomm had a first-movers advantage, we don’t believe one – or a small group of companies – will be able to snag control of the IoT market. Qualcomm, however, can look forward to a strong position. 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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    How A Slower-Than-Expected Expansion Can Impact Urban Outfitters' Value
  • By , 7/6/15
  • tags: URBN GPS ANF AEO
  • Urban Outfitters (NASDAQ:URBN) is among the very few apparel retailers in the U.S., who are still expanding their store base in the country. Others such as Gap Inc (NYSE:GPS) and American Eagle Outfitters (NYSE:AEO) are in the process of consolidating their respective networks. They had acquired a large store asset base before realizing that some stores would be redundant. Not only did several stores cannibalize their own sales, a large store network appeared irrelevant from the perspective of omni-channel retailing, which is undoubtedly the future of apparel retailing in the U.S. Last year, American Eagle unveiled plans to close 150 stores within three years and Gap Inc most recently announced its plans to shut 175 locations within a couple of years. However, Urban Outfitters was still in its growth stage, when the industry unanimously began to move towards omni-channel retailing and hence.  Accordingly, it did not have to worry about store consolidation. In fact, the company has been expanding steadily and will look to continue the same to a level it deems fit for the omni-channel model. We currently forecast that Urban Outfitters will continue to open stores steadily across formats, and will have over 900 stores operational in U.S. and abroad after five-six years. However, if the retailer plans to expand at a slower pace, focusing on omni-channel and online growth instead, the following scenario can unfold. Our price estimate for Urban Outfitters stands at $40, implying a premium of about 10% to the market price.
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    Examining Apple's Low P/E And How It Could Go Higher
  • By , 7/6/15
  • tags: AAPL SSNLF BBRY
  • Apple  (NASDAQ:AAPL) has strengthened its position as the world’s most valuable company, with its stock price rising by close to 40% over the last 12 months. Its $730 billion market cap now stands at about twice as much as the next biggest company, and accounts for close to 4% of the S&P 500. However, despite the strong growth and track record of beating expectations, the market assigns Apple’s stock P/E multiple of just 14x FY 2015 earnings (still lower ex-cash), while the broader S&P 500 trades at about 17x projected earnings. So what’s holding Apple’s stock back, and what could be the potential catalysts that could help it gain a higher multiple?
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    Ericsson Cuts 2,200 Jobs To Save Over $1 Billion by 2017, Improve Networks Margins
  • By , 7/6/15
  • tags: ERICSSON ERIC NOK
  • Global networking giant  Ericsson (NASDAQ:ERIC) announced earlier this year that it is planning to cut 2,200 jobs, as a part of its cost and efficiency program. In a recent update, the company said that this program was progressing, as over 1,700 employees (mainly in R&D) were given notices in June and were soon to leave the company. Following the completion of this round of job cuts, Ericsson will have reduced its Swedish workforce by a sizable 10%, saving almost $301 million by the end of Q2 2015 and about $1.08 billion by 2017. With R&D expenses increasing as a percentage of revenues over the past four years, Ericsson its trying to save money wherever possible in order to improve its networks EBITDA margins. If incremental savings through job cuts and other similar strategies help the company suppress the rise in R&D expenses going forward, pushing networks EBITDA margins up about 1.5 percentage points from our current long term forecast, Ericsson can potentially see its value go up by around 5%. Ericsson has been consistent in identifying redundancies in its R&D unit, with a fresh round of employee layoffs recurring every two years, in line with the change in technology. The most recent round of jobs cuts, coming after almost two-and-a-half years, appears to be prompted by a fall in operators’ interest in 2G and 3G, thanks to the arrival of 4G-LTE. The company’s efforts to cut costs is in line with its strategy to excel in its core areas of “Radio, Core and Transmission” and “Telecom Services”, in addition to funding growth in some key areas of IP networks, Cloud, TV and Media, OSS and BSS. This forms the core of Ericsson’s plans to transition from solely being a major telecom equipment manufacturer to a leading ICT player. It currently leads the $44 billion global Mobile (Wireless) Infrastructure market with a share of around 32-33%, closely followed by Chinese major Huawei. We have a price estimate of $13 for Ericsson,  in line with the market price.
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    European Banking Weekly Notes: HSBC, RBS and Deutsche Bank
  • By , 7/6/15
  • tags: HSBC RBS DB
  • European bank shares saw a sharp decline in value over last week, as share prices across sectors plummeted in response to Greece’s unexpected decision to put its bailout agreement to a referendum. With Greece likely to be forced out of the euro in the event the Greek public voted against proposed austerity measures, investor sentiments were at a notable low. The banking sector-specific STOXX Europe 600 Banks lost 4.5% of its value over the week – performing slightly worse than its multi-industry equivalent, the STOXX Europe 600 index, which fell by just under 4%. Notably, the STOXX Europe 600 was at its lowest level since last December at the end of the week.
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    Philip Morris: Future Prospects and Pressure From Headwinds
  • By , 7/6/15
  • tags: PM MO
  • Since 2009, Philip Morris International (NYSE:PM) has managed to deliver modest increases in revenues (see Figure 1) predominantly driven by market share gains and pricing. Although we expect the company to continue maintaining its revenues, a number of headwinds could threaten prospects going forward, namely:  a fall in volumes, an increase in regulatory control, a rise in contraband, and a strong U.S. dollar. However, does this mean things will be downhill from here on for Philip Morris? Probably not, and here’s why:   1. Volume declines in key markets : Philip Morris’ biggest advantage lies in the fact that the company operates across diverse geographical regions. Apart from allowing them to hedge against risks associated with any particular market, it also gives them exposure to a number of developing markets that had actually been seeing increasing cigarette volumes. However, in the past two years, volumes in key Asian, African, and Latin American markets have been facing declines against excise increases and tighter regulation. However, is this reason enough to worry? Probably not — Going forward, Philip Morris’ story could resemble its American counterpart Altria’s, where all the loss in volumes is compensated for by further price hikes. Most tobacco players are well aware that they are functioning in a declining industry and have instituted a number of ways to compensate for this, the most common being an increase in prices. This strategy actually works for these companies given the addictive properties of the product that they sell, which makes demand relatively price inelastic, i.e. demand is less sensitive to a change in price. Furthermore, in spite of declining cigarette volumes, certain segments such as reduced-risk products and e-cigarettes have been gaining momentum recently. In this case, these segments could offset some of the decline in cigarettes going forward. 2. Regulatory crackdown on tobacco sales : Players in the tobacco industry could be confronted with certain benefits on the merit of the addictive property of cigarettes. One of this is a relatively acyclicality, or a slower response of cigarette sales to business cycle fluctuations. However, for this very property, the tobacco industry is often scrutinized by regulators and health advocates. For instance, many markets have recently seen policy changes in terms of advertising, smoking in public areas, and packaging. In this situation, Philip Morris’ success may be highly conditional on these policies since they could potentially hurt volumes.  Over the next few years, the European Union is set to introduce a number of new rules, which includes a 65% coverage of cigarette and roll-your-own tobacco packs with picture warnings, a ban on “lipstick-style” packs that target women smokers, flavor additives (including menthol), and the 10-cigarette packs. Furthermore, the EU will also install a maximum nicotine-concentration limit on e-cigarettes, a ban on promotional lines such as”this product is free of additives” or is “less harmful than other brands.” These measures, when implemented, could have an impact on demand. Having said this, however, companies like Philip Morris are used to this constant source of stress from regulatory authorities. Furthermore, in many cases policies such as plain packaging laws, or a ban on advertisements, could actually be good news for Philip Morris, since it could make it harder for smaller tobacco companies to build their customer base, leading them to eventually drop out of the market. Such laws could also deter new entrants, in which case, lesser competition could be an advantage for Philip Morris in terms of higher market share and stronger pricing power. 3. Increase in illegal sales : Going forward, Philip Morris could be hiking up prices — partly in response to excise hikes, and partly to mitigate losses from declining volumes against increasing anti-smoking regulation, and rising health awareness among consumers. However, as prices keep increasing so could the proliferation of contraband. According to the company, Marlboro is the “most heavily counterfeited international cigarette brand,” which along with “contraband, legal cross-border purchases, and non-tax-paid volume produced by local manufacturers” has resulted in sizeable revenue losses for Philip Morris. According to a recent report by KPMG, approximately 10.4% of all cigarettes consumed in Europe were illicit. In Australia, the figure was stood at about 14%. Furthermore, a report by International Tax and Investment Center and Oxford Economics in 2012 suggests that close to 9% of all cigarettes sold in Asia were illicit — with some five markets having a share of over 25%. However, illicit trade has been a factor that tobacco companies have been historically battling. While increasing illicit trade leads to reduced revenues for tobacco companies, it could ward off further excise increases. This is because, from a policy standpoint, a burgeoning illicit market will fail to actually reduce cigarette consumption, while hurting government finances in terms of higher costs to keep illicit tobacco under check, and lower excise income from the sale of tobacco in the legal market. 4. Strengthening U.S. Dollar : Lastly, there is the matter of the U.S. dollar. Philip Morris has been facing tougher circumstances as the U.S. dollar has strengthened tremendously against a number of key currencies. Since a majority of Philip Morris’ sales are conducted in local currencies, a stronger U.S. dollar implies fewer dollars in exchange for the local currency. The Dollar Currency Index, which measures the strength of the U.S. dollar against a number of other currencies, has continuously gained points over the past year, to hit its highest level in nine years. In Philip Morris’ case, a weaker Russian ruble, Japanese yen, Argentine peso, Ukraine hryvnia, and Indonesian Rupiah, resulted in lost revenues of approximately $2 billion in 2014. Going into 2015, some analysts anticipate the dollar value to fall especially as the Federal Reserve acknowledges how a strong dollar is curtailing growth in the U.S. economy. However, others expect further strength as the U.S. economy continues to remain upbeat in comparison to a number of other countries. Furthermore, the anticipation of an interest rate hike could also increase dollar demand to set the currency hitting further highs. Against this, going into 2015, Philip Morris anticipates net earnings to be impacted by close to $1.7 billion adversely affecting free cash flows. If the dollar strengthens further, this figure could be even larger. However, currency headwinds may not be reason enough to write off the stock since it could just be a short-term phenomenon. Although the stock has been harmed due to unfavorable exchange rate movements, fundamentals have not really changed much. For instance, on a currency neutral basis, adjusted diluted EPS witnessed a 7.8% growth in 2014 and is expected to undergo a 8-10% growth even in 2015. Given that Philip Morris is not going wrong structurally, but has just fallen prey to dynamics in currency, there may be good news in store for the company as the dollar rate eases. In conclusion, although Philip Morris has managed to sustain its revenues so far, it could have much to face both at the micro and macro levels. In spite of this, we believe that these may just be temporary headwinds, that the company could work around, to go on to deliver promising results in the longer term. We have a price estimate for Philip Morris’ stock price of around $80,  which is 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
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    Alcoa Q2 Earnings Preview: Productivity Improvements To Offset Impact Of Weak Aluminum Pricing
  • By , 7/6/15
  • tags: AA RIO
  • Alcoa (NYSE:AA) will release its Q2 2015 results and conduct a conference call with analysts on Wednesday, July 8. We expect the company’s efforts to boost the productivity of its operations, including the closure of high cost smelting capacity, to offset the impact of weak aluminum prices on its quarterly results. In addition, a spate of acquisitions over the past year should boost the volumes of the company’s Engineered Products and Solutions (EPS) business segment. Alcoa further advanced the transformation of its product portfolio towards value-added segments with more announcements in Q2. In this article, we will take a look at what to expect from Alcoa’s Q2 results. See our complete analysis for Alcoa Aluminum Pricing Aluminum has diverse applications in industry. It is an important input in the packaging, aerospace, automotive, construction, commercial transportation, power generation, capital goods, and consumer durables industries. Thus, demand for aluminum is broadly correlated with industrial growth. Economic weakness in Europe and slowing Chinese growth have contributed to the weakness in aluminum demand, and consequently prices, over the last few quarters. China, the world’s largest consumer of aluminum, is expected to witness a slowdown in GDP growth to 6.8% and 6.3% in 2015 and 2016, respectively, from 7.4% in 2014. On the supply side, production capacity has not been reduced corresponding to the weakness in demand over the last few quarters. Persistently high aluminum inventory levels relative to demand have kept LME aluminum prices depressed. This inventory was built up partially as a result of aluminum being tied up in financing deals, which were made possible due to low interest rates. Despite inventories being at a record highs, market forces failed to rationalize supply through the shutdown of smelting capacity. Though global aluminum majors like Alcoa and Rusal did make significant smelting capacity cuts, the same was not true of Chinese companies. This was primarily due to state intervention in the form of provisions of subsidies or renegotiated power contracts to smelters, which serve as a disincentive to cut production. China accounts for around half of the world’s aluminum production, and the expansion in production by Chinese producers has more than made up for capacity cuts by global majors. This oversupply situation is expected to keep aluminum prices depressed. As a result of the fall in LME prices, regional aluminum prices in China are trading below the costs of production of a majority of Chinese domestic smelters. However, Chinese aluminum producers were boosted by a recent decision of the Chinese government to provide tax breaks and subsidized power to domestic aluminum smelters. In addition, the Chinese government also reduced export taxes on Chinese exports of the metal earlier in the year. A combination of these factors is likely to lead to an increase in Chinese production and exports, which could further worsen the gap between supply and demand, resulting in weak global aluminum prices. This is reflected in the trajectory of London Metal Exchange (LME) aluminum prices so far this year. LME aluminum prices averaged roughly $1,800 per ton over the course of the second quarter in 2014. These prices averaged close to $1,750 per ton in Q2 2015.  Lower aluminum prices are likely to weigh on the company’s results, particularly those of the Primary Aluminum and Alumina business segments. Recent Developments Alcoa announced the permanent closure of its Poços de Caldas primary aluminum smelter in Brazil, with effect from June 30. Alcoa has been reducing high cost smelting capacity, as it seeks to better align its business to the lower aluminum pricing environment. Alcoa’s smelting capacity stood at 3.5 million tons per year (MTPY) at the end of 2014, as compared to 4.04 MTPY at the end of 2013. With the closure of the Poços de Caldas smelter, the company’s smelting capacity will be reduced further to 3.4 MTPY. The reduction in smelting capacity is reflected in the company’s aluminum shipment forecasts. See our forecasts for Alcoa’s primary aluminum shipments The closure of high cost smelting capacity and other productivity improvements boosted the company’s pre-tax profits to the tune of $238 million in Q1.  The company is targeting savings of $900 million for the whole year. The company’s productivity improvement initiatives are expected to offset the impact of weak aluminum pricing on the company’s Q2 results on a year-over-year basis. Alcoa continued the transformation of its product portfolio in Q2 as well. The company invested $22 million to set up Hot Isostatic Pressing (HIP) technology capabilities at its aerospace facility in Whitehall, Michigan. The move will boost the company’s capacity to produce titanium, nickel and 3D-printed jet engine parts. As a result of smelting capacity closures and acquisitions and investments, which have boosted Alcoa’s capacity for value-added products, Alcoa has been increasing the share of value-added businesses in its revenues. Alcoa’s Global Rolled Products (GRP) and Engineered Products and Solutions (EPS) divisions, which produce value-added light metal products with a focus on the automotive and the aerospace markets, together accounted for 57.4% of the company’s overall revenues in Q1 2015, as compared to 54.4% in 2012. In calculating these figures, we have only considered third-party sales. The company’s increasing emphasis on value-added products was reflected in the EPS segment’s shipment figures, which rose 17% year-over-year in Q1. What We Would Like To Know From The Conference Call In view of the company’s ongoing portfolio transformation, we would like to know from the company management, what the flurry of activity in the company’s value-added business segments would translate into, in terms of revenue and margin improvement. It would shed some light on the road ahead for Alcoa. View Interactive Institutional Research (Powered by Trefis): Global Large Cap |  U.S. Mid & Small Cap |  European Large & Mid Cap More Trefis Research  
    Shale Revolution Accelerates Chemicals Industry
  • By , 7/6/15
  • tags: CE DOW DD
  • Submitted by Wall St. Daily as part of our contributors program Shale Revolution Accelerates Chemicals Industry By Tim Maverick, Commodities Correspondent It certainly is a good time for the $800-billion U.S. chemicals industry. According to the American Chemistry Council (ACC), U.S. chemical production will continue to expand this year and next. The ACC forecast year-over-year output growth of 3.2% for 2015 and 3% for 2016, and foresees even better times ahead. It expects the domestic chemical industry’s growth to exceed that of the nation as a whole in the years to come. The ACC sees the industry becoming a growth engine for the economy, forecasting a rise in the 5% range in the 2017-to-2019 period. It also expects record trade surpluses for the industry by 2020. The chemicals industry owes most of its recent success to one crucial factor. Shale Revolution = Chemical Renaissance The game-changing innovation of fracking has unlocked reserves trapped in shale formations across the United States. Fracking has released abundant and cheap natural gas and natural gas liquids (NGL), such as ethane, which have revived the U.S. chemicals industry. You see, U.S. companies now enjoy a huge advantage over foreign competitors that use naphtha as a feedstock. Naphtha is derived from crude oil, and is still expensive relative to NGLs. The shale gas revolution has literally turned the global chemicals industry on its head. Less than a decade ago, the outlook for producers of domestic bulk chemicals, such as ethylene, was grim, with production capabilities being shipped overseas. But now, more and more investment in U.S. production capacity is either underway or in various stages of planning. An Investment Catalyst According to the ACC, 238 U.S. chemicals companies have announced investment projects worth a total of $145 billion. That’s up from $90 billion in announced projects as of mid-2014. Capital spending in the industry soared 64% from 2010 to 2014, to $33.4 billion. The ACC expects spending to jump another 37% to $45.8 billion by 2018. Note that about 61% of the announced investment in U.S. chemicals production is coming from foreign companies. That’s not to say, however, that U.S. companies are standing on the sidelines. U.S. companies spending big to ramp up production include Du Pont ( DD ), Dow Chemical ( DOW ), Eastman Chemical ( EMN ), Westlake Chemical ( WLK ), Celanese ( CE ), and LyondellBasell Industries ( LYB ). Major oil companies such as ExxonMobil ( XOM ) are also boosting their chemicals capacity. Dow Chemical, for example, is spending $6 billion on expanding its Gulf Coast facilities, including a new “cracker” plant to produce ethylene. This hydrocarbon is a basic building block for other industrial chemicals. LyondellBasell CEO Bob Patel, who succeeded longtime leader Jim Gallogly in January 2015, recently told the Financial Times that he expects the oil-to-gas price ratio to remain favorable for U.S. companies. And he continues to see the United States as the most favorable location for ethylene production. Positive Reaction The recent performance of LyondellBasell’s stock indicates that investors can make a lot of money from a well-run chemical company. LyondellBasell listed on the New York Stock Exchange in October 2010. Since then the share price has nearly quadrupled. And the company is enjoying strong operating momentum, with management reporting record earnings per share for the first quarter of 2015. With the shale boom showing few signs of petering out, U.S. chemicals producers are set to benefit from low natural gas and NGLs prices for the foreseeable future. Are these – dare we say it – the best of times for the industry? And the chase continues, Tim Maverick The post Shale Revolution Accelerates Chemicals Industry appeared first on Wall Street Daily . By Tim Maverick
    The Philippines: A Safe Haven for Investors
  • By , 7/6/15
  • tags: EPHE PHI
  • Submitted by Wall St. Daily as part of our contributors program The Philippines: A Safe Haven for Investors By Martin Hutchinson, World Banking Analyst Governments around the world have been printing money and running huge budget deficits for the last seven years. Policymakers’ actions have greatly inflated the prices of stocks and other assets. Sooner or later, this bubble must surely burst. Emerging markets are supposedly the most threatened, largely because any credit crunch would stifle their funding. Yet there’s one emerging market that runs a balanced budget, has avoided monetary stimulus, is growing rapidly, and has a balance of payments surplus that should insulate it against another financial crisis. That happy country is the Philippines. The International Monetary Fund (IMF) estimates that Philippine real GDP will grow 6.7% in 2015 and 6.3% in 2016, following an average growth rate of 6.3% annually from 2010 to 2014. Even with population growth of 1.8% per annum, that sort of growth rate makes a country richer quite quickly. Now, that level of growth is also typically accompanied by inflation and a huge balance of payments deficit as the government, seduced by all the money sloshing around, loses control of spending. But that’s not happening in the Philippines. The country’s 2015 budget deficit is estimated by The Economist’s team of forecasters to be 1.9% of GDP, which, given the country’s economic growth, means public debt levels will decline as a percentage of GDP. What’s more, the IMF estimates that the Philippines will run a current account surplus of more than 5% of GDP in both 2015 and 2016. Looking for countries to run balance of payments surpluses has gone out of fashion since the days of the mercantilist Thomas Mun (1571-1641, author of England’s Treasure by Foreign Trade ). However, in a world of sloppy monetary policies and periodic credit crises, it makes sense. When the bubble bursts, the Philippines’ stock market will crash alongside the rest of the world’s markets . . . but the exchange rate should remain pretty stable, and neither the Philippine government nor the country’s major companies should require emergency bailouts. Ultimately, that will preserve long-term shareholder value. Three Investment Opportunities After a lengthy dictatorship dating to 1986, the Philippines has had steadily improving governments. The current president, Benigno Aquino, is the son of former President Cory Aquino, and he has pursued relatively free-market policies. While there’s an election due next year (for which Aquino can’t run), policy continuity seems quite likely. Thus, it’s worth considering a modest investment in the Philippines right now. You might consider one of the following: 1) The iShares MSCI Philippines ETF ( EPHE ) seeks to track the performance of the MSCI Philippines Investable Market Index, which has returned an average of 15.7% per annum over the last 10 years in dollar terms. That’s the best performance of any broad country index, and at 19x price to earnings, it doesn’t seem overvalued. EPHE provides a modest dividend yield of 0.9% and has an expense ratio of 0.62%, which is satisfactory given the illiquidity of some of its holdings. Its top 10 holdings cover a broad spectrum of the Philippine economy. 2) Manila Water Company ( MWTCY ) serves a population of about six million in Manila and surrounding cities. MWTCY trades at a modest trailing P/E of 10.2x and paid a dividend of 0.81 pesos in 2014 (each ADR trading in the United States represents 25 shares, so that’s equivalent to $0.455 per ADR, a yield of 3.1%). Earnings for this very stable business trend gently upwards, with analysts expecting a roughly 8% increase for 2015. Manila Water is part of the giant Ayala Group and has international expansion plans in Vietnam. Through its affiliate, Saigon Water Infrastructure Co., MWTCY plans to supply water to Ho Chi Minh City. 3) With approximately 70 million subscribers, Philippine Long Distance Telephone Company ( PHI ) is the dominant telecom provider, both wireless and landline, in the Philippines. It also has a joint venture with Rocket Internet AG to develop online payment solutions. PHI trades at a P/E of 18x, with earnings trending gently upwards. It also carries a juicy yield of 4.5%, so this is the best Philippine buy for income investors. However, Philippine withholding tax is 30%, so you need to hold it in a taxable account to resolve the Philippines/U.S. double-tax treaty. Good investing, Martin Hutchinson The post The Philippines: A Safe Haven for Investors appeared first on Wall Street Daily . By Martin Hutchinson
    Toyota’s Mirai Goes the Distance
  • By , 7/6/15
  • tags: SPY TM TSLA
  • By Chris Worthington, Editor-in-Chief of Income In 1997, Toyota ( TM ) introduced its first hybrid electric vehicle, the Prius. Nearly 20 years later, the automotive landscape has changed significantly, and hybrids have been surpassed by so-called zero-emissions vehicles (ZEV) powered by either electric battery or fuel cells. Most people are familiar with electric cars, particularly Elon Musk’s Tesla  ( TSLA ). But fewer people are familiar with fuel cell vehicles such as Toyota’s Mirai, which happens to be the world’s only mass-marketed car of its kind. Basically, the Mirai’s fuel cell stack converts compressed hydrogen gas into electricity, which is stored in batteries and then used to power the motor. The car must be refueled at hydrogen fueling stations. Electric cars, on the other hand, are powered entirely by batteries that must be recharged at specially designed charging stations. Now, for years, electric cars were the dominant ZEV of choice . . .  but that may be changing. On Tuesday, Toyota North America CEO Jim Lentz announced an official mileage figure for the Mirai, which gets 67 miles per gallon equivalent and can travel 312 miles before refueling. That gives the Mirai the longest range of any zero-emissions vehicle, a key differentiator. Another advantage is quicker refueling times. While electric vehicles may take a half hour or more to charge, Toyota’s vehicle can be refueled in just five minutes. Of course, this new era of hydrogen transportation comes at a hefty cost. The sticker price for the Mirai is just over $58,000, making it 42% more expensive than the average new car in 2015. But a combination of federal and state incentives can lower the price by $13,000, and Toyota is offering buyers three years or $15,000 worth of complimentary fuel, whichever comes first. Finally, the car comes with an eight-year, 100,000-mile warranty. This fall, the Mirai will be available in California, which is one of the only states with the infrastructure necessary to keep hydrogen vehicles on the road. Do you think Toyota’s hydrogen vehicle will take off here in the United States? Tell us what you think in the comments section! Good investing, Chris Worthington The post Toyota’s Mirai Goes the Distance appeared first on Wall Street Daily . By Chris Worthington
    Kraft Foods Logo
  • commented 7/6/15
  • tags: KRFT
  • Nutraceuticals Market: Asia Pacific Industry Analysis and Opportunity Assessment 2014 - 2020: Future Market Insights

    With improved standard of living and changing lifestyle in Asia-Pacific, market has experienced a sea change in consumer's food habits and buying pattern. Irregular eating, junk food and hectic lifestyle has resulted in their ill health. Thus, giving rise to a number of diseases, mostly related to nutritional deficiencies. Nutraceuticals can play a vital role in curbing the above mentioned health issues. They provide medicinal and health benefits for the treatment of diseases. The potential of this market is increasing particularly in Asia-Pacific due to the challenging lifestyle of the people who are looking for a modern and quick approach to fight for diseases or to prevent them.

    Browse Full Report@ http://www.futuremarketinsights.com/reports/details/asia-pacific-nutraceuticals-market

    Nutraceuticals promotes longevity and various health benefits. They are easily available and economically affordable. It claims to have a psychological benefits too in diseases like Chronic Inflammatorydisorder, degenerative diseasesand antidiabetics. Few nutraceutical products like green tea, omega 3 fatty acids prevents obesity, helps in weight loss, improved glowing skin and cancers too.For example milk is a nutraceutical which is good for the heart and muscles.

    Nutraceuticals can be segmented into three major groups - Dietary Supplements, Functional Foods and Functional Beverages. Dietary supplements is sub segmented into vitamin & mineral supplement, herbal supplements like ayurvedic extracts, plant extracts andprotein supplements like protein powder & lifestyle products. Functional Food is sub segmented into may have omega fatty acid foods, probiotic foods and functional beverage market has energy drinks, sports drinks and fortified juices. Few commonly used nutraceuticals in India are Arjuna Sheerapka(for cardio protection), Shatavari Grihta(for women's health during various physiological states) and Brahma Rasayana (for protection from mental stress).

    The market is growing substantially at a healthy CAGR 2015-2020 primarily due to rising demand of the dietary supplements and increasing shift towards preventive therapies. Many companies are entering in this market to meet the consumer demand of the nutraceuticals. In India, it is still at a very nascent stage, however, other Asia Pacific countries such as China, Japan, Brazil and Australia are key growth regions where the demand for nutraceuticals is huge. Also they are the key target markets for manufacturers. Globally, U.S. and Europe are the largest markets. Germany is the largest market in the European region. The biggest driver could be that these countries are the best destination for innovations in the nutraceutical ingredient industry. Strict legislation against the use of chemical ingredients in food products and more usage of ingredients derived from natural products is another reason why these markets are flourishing in this sector.Rising disposable income coupled with growing awareness about health & wellness are also major drivers for augmented nutraceuticals demand in Asia-Pacific countries.

    Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-ap-189

    Fortification, alteration, enhancement are few of the technologies which are used for nutraceuticals. To improve the bioavailability of nuetraceuticals, patenting of new delivery systems is a new trend like in nanotechnology which is a rapidly evolving interdisciplinary field based on the manipulation of matter on a submicron scale. Recently it has been found that Cactus plant's spectrum, which is anti-cancer, anti-viral, anti-diabetic has a rich source of fibre and edible pulp. In cactus pear, taurine is a major contributor, which is fast becoming an active constituent of nutraceuticals. WHO(World Health Organisation)has launchedthe first Global Strategy to address issues related to traditional medicine. The European Commission has confirmed that health claims would be on their next agenda for disease risk reduction.
    Major players in this industry are Cadilla Healthcare, Pfizer, Nature's Answer, USA, Celestial Biolabs LtdMagnum, Numico, APS, Omvita.
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    Nutraceuticals Market: Asia Pacific Industry Analysis and Opportunity Assessment 2014 - 2020: Future Market Insights With improved standard of living and changing lifestyle in Asia-Pacific, market has experienced a sea change in consumer's food habits and buying pattern. Irregular eating, junk food and hectic lifestyle has resulted in their ill health. Thus, giving rise to a number of diseases, mostly related to nutritional deficiencies. Nutraceuticals can play a vital role in curbing the above mentioned health issues. They provide medicinal and health benefits for the treatment of diseases. The potential of this market is increasing particularly in Asia-Pacific due to the challenging lifestyle of the people who are looking for a modern and quick approach to fight for diseases or to prevent them. Browse Full Report@ http://www.futuremarketinsights.com/reports/details/asia-pacific-nutraceuticals-market Nutraceuticals promotes longevity and various health benefits. They are easily available and economically affordable. It claims to have a psychological benefits too in diseases like Chronic Inflammatorydisorder, degenerative diseasesand antidiabetics. Few nutraceutical products like green tea, omega 3 fatty acids prevents obesity, helps in weight loss, improved glowing skin and cancers too.For example milk is a nutraceutical which is good for the heart and muscles. Nutraceuticals can be segmented into three major groups - Dietary Supplements, Functional Foods and Functional Beverages. Dietary supplements is sub segmented into vitamin & mineral supplement, herbal supplements like ayurvedic extracts, plant extracts andprotein supplements like protein powder & lifestyle products. Functional Food is sub segmented into may have omega fatty acid foods, probiotic foods and functional beverage market has energy drinks, sports drinks and fortified juices. Few commonly used nutraceuticals in India are Arjuna Sheerapka(for cardio protection), Shatavari Grihta(for women's health during various physiological states) and Brahma Rasayana (for protection from mental stress). The market is growing substantially at a healthy CAGR 2015-2020 primarily due to rising demand of the dietary supplements and increasing shift towards preventive therapies. Many companies are entering in this market to meet the consumer demand of the nutraceuticals. In India, it is still at a very nascent stage, however, other Asia Pacific countries such as China, Japan, Brazil and Australia are key growth regions where the demand for nutraceuticals is huge. Also they are the key target markets for manufacturers. Globally, U.S. and Europe are the largest markets. Germany is the largest market in the European region. The biggest driver could be that these countries are the best destination for innovations in the nutraceutical ingredient industry. Strict legislation against the use of chemical ingredients in food products and more usage of ingredients derived from natural products is another reason why these markets are flourishing in this sector.Rising disposable income coupled with growing awareness about health & wellness are also major drivers for augmented nutraceuticals demand in Asia-Pacific countries. Request Report TOC@ http://www.futuremarketinsights.com/toc/rep-ap-189 Fortification, alteration, enhancement are few of the technologies which are used for nutraceuticals. To improve the bioavailability of nuetraceuticals, patenting of new delivery systems is a new trend like in nanotechnology which is a rapidly evolving interdisciplinary field based on the manipulation of matter on a submicron scale. Recently it has been found that Cactus plant's spectrum, which is anti-cancer, anti-viral, anti-diabetic has a rich source of fibre and edible pulp. In cactus pear, taurine is a major contributor, which is fast becoming an active constituent of nutraceuticals. WHO(World Health Organisation)has launchedthe first Global Strategy to address issues related to traditional medicine. The European Commission has confirmed that health claims would be on their next agenda for disease risk reduction. Major players in this industry are Cadilla Healthcare, Pfizer, Nature's Answer, USA, Celestial Biolabs LtdMagnum, Numico, APS, Omvita.

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