Adobe Is Winning the Shift to the Cloud
December 17, 2012
Adobe’s shift to a cloud-based model looks to be paying off as the firm reported a strong outlook for 2013.
Sprint/Clearwire Deal Closes at $2.97 Per Share
December 17, 2012
Wireless provider Sprint (click ticker for report: ) will acquire Clearwire (click ticker for report: ) for $2.97 per share, pegging the company’s enterprise value at $10 billion. The deal also includes bridge financing of $800 million, and as wtih the SoftBank deal, it is expected to close mid-2013. Last week, Sprint offered $2.90 per share for the company, and shares spiked to well over $3. We’ve seen several large minority shareholders voice concerns about the relatively low valuation the deal gives the company based on its net asset value, which appears to be a valid concern given the recent deals for spectrum. However, the previous connection (Sprint owns over 50% of Clearwire) between the two companies has put Clearwire
GE Boosts Its Dividend; Remains a Solid Dividend Growth Idea
December 16, 2012
On Friday, industrial conglomerate General Electric (click ticker for report: ) raised its dividend 12% to $0.19 per share per quarter (slightly better than we had expected), and it also added $10 billion to its share buyback program. The firm didn’t give any additional updates, but both moves display management’s confidence in the company’s future. We plan to update our dividend report on GE soon. The higher dividend payout gives shares of GE a 3.5% yield at current levels, making it a relatively attractive income play, in our view. In its third quarter, GE reported positive earnings growth across all 5 of its industrial segments for the first time since 2005, so the firm’s fundamentals are heading in the right
Sprint Courts Clearwire; Will a Deal Surface?
December 14, 2012
Sprint needs Clearwire. Clearwire needs Sprint. So what’s the problem? Let’s dig in.
We Take a Deep Dive into the Future Prospects of Best Idea Google
December 14, 2012
Before the meteoric rise in the price of Apple (click ticker for report: ), Google (click ticker for report: ) stole most of the tech-stock headlines and, according to some, was pretty much a sure bet to become a $1,000 stock. However, looking under the hood, the company has had some turmoil during the past few years. In addition to bringing back founder Sergey Brin as the CEO, the company has created the world’s most successful mobile operating system to date (Android), a social network with over 100 million users, and failed to purchase Groupon (click ticker for report: ), which at the present seems like it was a blessing. Additionally, the company is working on cars that drive themselves, shuttered Google Wave
Are Apple’s Fundamentals Deteriorating?
December 14, 2012
Given Apple’s (click ticker report: ) recent share price performance during the past 3 months, we’ve heard whispers questioning the strength of the company’s fundamentals. It first started with the Google Maps (click ticker for report: ) debacle when somehow replacing the default maps program on the iPhone with an inferior product was going to sink the entire company. Then fears of the iPad Mini–either not selling or cannibalizing sales of the full-sized iPad and subsequently crippling margins–became the next fear. Apple’s Fundamentals Remain Sound However, there is no evidence of a product slowdown at Apple. The iPad Mini sold out its first run in a short amount of time, and data over the Black Friday weekend showed that the iPad
Phillips 66 Joins the MLP Boom
December 13, 2012
Early Thursday morning, refiner and chemical producer Phillips 66 (click ticker for report: ) announced its capital-spending intention for 2013, which includes $3.7 billion in capital investment—up 6% compared to 2012. The firm also announced ambitions to raise $400 million for a minority stake in a new master limited partnership (MLP) IPO, which it anticipates will include transportation assets like pipelines, rail cars, as well as NGL products for transportation. Phillips 66 described the MLP as an opportunity to capitalize on the “North American oil and gas revolution.” MLPs tend to have favorable tax treatment for oil-transportation business models, and we think the new Phillips 66 MLP will be a unique play on one of the best-performing refiners. The MLP
DuPont Announces Repurchase Program and Solid Fiscal Year 2013 Guidance
December 13, 2012
Though chemicals will be weak, the rest of DuPont should grow at a strong clip.
Joy Global Sees Mining Weak in 2013
December 12, 2012
Mining equipment manufacturer Joy Global isn’t too bullish about the strength of the mining industry in 2013.
Dollar General Blames the Consumer for Weak Guidance
December 12, 2012
Tuesday morning, value chain Dollar General (click ticker for report: ) reported stronger than expected results for its third quarter. Revenue rose 10% year-over-year to $4 billion, roughly in-line with consensus expectations. Earnings, adjusted for a one-time expense, jumped 26% year-over-year to $0.63 per share. During the third quarter, same-store sales grew 4% year-over-year, down compared to the second quarter, but still a fairly strong growth rate, in our view. The firm’s gross margin fell 10 basis points to 30.9%, though its operating margin increased 50 basis points to 9.1% due to strong cost containment. While the third quarter was relatively strong, management was cautious about the rest of the year. The company narrowed its earnings-per-share range to $2.82-$2.85 from
