AOL

Guide to Second Quarter Earnings; Big Cap Tech Sets Somber Mood

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Image Source: Fortune Live Media, Fortune Most Powerful Women Dinner With Yahoo CEO Marissa Mayer Apple (AAPL) There were no real surprises in Apple’s fiscal third quarter (calendar second quarter) results. The iPhone maker posted record quarterly revenue and net earnings of $49.6 billion and $10.7 billion, up ~33% and ~39%, respectively, thanks to record fiscal third-quarter sales of iPhone and Mac; its highest ever sales from services and the successful execution of the launch of the Apple Watch also buoyed performance. An “amazing quarter,” iPhone revenue advanced 59%, and customers and investors alike are looking forward to the release of iOS 9, OS X El Capitan and watchOS 2 in the fall. Apple’s gross margin expanded 30 basis points in … Read more

Reiterating Our $100 Per Share Valuation of Facebook

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Summary: We think Facebook has just scratched the surface of its earnings potential. Let’s address the potential for a single stock bubble in Facebook, the company’s most recent results, and why we think it garners a very attractive Economic Castle rating. We value shares of Facebook at $100 each, implying roughly 25% upside based on the firm’s most recent closing price. ———- “Intrinsic value represents the conclusion to any and all stock research: What is the company worth? DCF valuation captures the expectations of a firm’s competitive advantages, growth prospects, strategic endeavors, and any other qualitative factor. No other process does this. Putting to numbers a plethora of advanced fundamental items in arriving at a fair value estimate is the … Read more

Valuentum Mosaic Exclusive: Talks Between Yahoo and eBay Probable

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Let’s put it this way: the combined eBay and PayPal entity presently listed under the ticker symbol eBay (EBAY) is cheap. The combined company is trading in the mid-$50s with a market capitalization of ~$69 billion at present, and we value its shares in the mid-$70s (a ~$90+ billion valuation). We’re not the only one, in case you think that, despite everything we seem to get correct, we’re off our rockers with this valuation. Stifel, for example, recently labeled $75 per share as an upside case for the company. eBay remains a holding in the Best Ideas portfolio, and the equity markets are simply getting the company’s valuation wrong, in our view. It is one of the few true bargains … Read more

Starboard and Yahoo

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The Marissa Mayer hype has been exciting and refreshing. But with Mayer and the executive suite having done little to turn around the core operations of Yahoo (YHOO), and more recently snubbing talks about tying the knot with AOL (AOL), the time may be ripe for a shakeup. Activist investor and investment management firm Starboard Value thinks so. In an open letter to Mayer and the board of directors of Yahoo, Starboard Value announced that it has acquired a significant ownership stake in the beleaguered, and once-relevant, Internet portal.  Starboard outlined a case for Yahoo to monetize the company’s non-core minority equity investments (Alibaba, Yahoo Japan) in a tax-efficient manner and tie-up with AOL, which itself has been on the … Read more

Price Is Almost Always Different Than Value

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It was January 10, 2000. America Online had just announced that it would acquire Time Warner to create the largest media company. The purchase price amounted to more than $160 billion, and the combined entity was estimated to have a market capitalization of ~$350 billion. The deal was the biggest corporate merger to that date and was expected to launch the next Internet revolution, according to then-CEO of AOL Steve Case. The transaction valued Time Warner at about $108 per share, a huge premium over its price of $64.75 per share the trading session before. AOL’s shares closed at $72 the day of the announcement. Just a couple years later, things were quite different. When it reported full-year 2002 results, … Read more

January 5-9: The Week That Was – Drowning in Crude

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By Brian Nelson, CFA The first full week of 2015 was a wild one! Monday and Tuesday brought some hefty losses to the indices, but the middle of the week helped recover most of the ground, only to give some of it back Friday. When all was said and done, however, the S&P 500 still closed comfortably above 2040, a huge leap from just 5-6 years ago. We’re still enjoying the good times, with economic data still coming in relatively sanguine. Like a frog in water, the markets are just waiting for the next shoe to drop, and the Federal Reserve is doing all that it can to assure investors that the Yellen-put is there to prop up the markets should … Read more