Author Archives: Scalper1

Apple, Facebook Among Top Technology Investment Choices

Facebook ( FB ) received honors as the top Internet investment idea by Credit Suisse, followed by Amazon.com ( AMZN ) and Alphabet ( GOOGL ). In tech hardware, Apple ( AAPL ) is a favorite. Credit Suisse based its picks on a six- to 12-month time horizon. Credit Suisse analyst Stephen Ju says Facebook can drive long-term revenue growth without a material lift in ad loads. Near-term ad growth drivers include Facebook’s video- and photo-sharing site Instagram and its premium video, which brings in high ad rates. He says Wall Street’s projections for Facebook are too conservative and underestimate the long-term moneymaking potential of other products, including Messenger and WhatsApp. Ju has a price target on Facebook stock of 135. Facebook stock was down 2.5%, near 110, in afternoon trading in the stock market today . Amazon, Ju’s No. 2 investment, should provide upside to estimates, he says, in part from ongoing strength in e-commerce. Ju has a price target on Amazon of 800. Amazon stock was up a fraction Friday afternoon, near 593. Ju expects Alphabet to narrow the monetization gap between mobile and desktop, while increasing ad loads. He also expects Alphabet to get strong growth from YouTube and its Google Play app store. His price target on Alphabet stock is 930. Alphabet stock was down a fraction Friday afternoon, near 756. Regarding Apple, Credit Suisse analyst Kulbinder Garcha rates it a top investment idea, saying multiple growth drivers include its strength with the iPhone, iPad and Mac computer and greater adoption of the iOS ecosystem. Another is Apple’s commitment to cash distributions. Garcha has a price target on Apple of 150. Apple stock was trading above 128, up a fraction, Friday afternoon.

Yahoo Extends Bidding Deadline, But Will Google And Verizon Bite?

Yahoo ( YHOO ) has pushed back the deadline for bids on the company by one week, to April 18 rather than this coming Monday, according to media reports. “We’ll see who bids — and, more to the point, who gets passed through to the next round. It’s a little like the ‘Hunger Games,’ except you get to live and then have to overhaul the Silicon Valley Internet giant,” Re/Code wrote  Friday. Verizon Communications ( VZ ) is said to be planning to make a  first-round bid for Yahoo’s Web business and is also planning to bid for the company’s holdings in Yahoo Japan to help sweeten its offer, Bloomberg said. Google, the main division of Alphabet ( GOOGL ), is also reportedly considering a bid for Yahoo’s core business. One-time potential suitors including AT&T ( ATT ) and Comcast ( CMCSA ) have decided against bidding, the Bloomberg report said.  Microsoft ( MSFT ), which failed with a hostile bid for Yahoo in 2008, also won’t bid, according to the report. Time ( TIME ); Japan’s SoftBank ( SFTBY ), the majority owner of Yahoo Japan; and several private equity firms also are kicking the tires, reports Bloomberg. Verizon and its subsidiary AOL are working with at least three financial advisers on its bid, the report said. Re/Code said earlier this week that documents Yahoo provided to potential bidders predict the Web portal’s 2016 revenue will drop by close to 15% and its earnings by more than 20%. Yahoo’s inability to fully embrace the transition to mobile has meant that “usage and monetisation are moving to areas where Yahoo is unable to follow,” wrote Edison Investment Research analyst Richard Windsor in a research note Friday. Windsor said that Yahoo has been “buying traffic in order to prop up the popularity of its online properties. Effectively, Yahoo is masking the declines in its revenue by buying revenue-generating traffic from other websites and services. This means that the revenue genuinely generated by Yahoo’s properties will fall by 14% this year to $3.6 billion.” Yahoo has not commented on the reports. Analysts polled by Thomson Reuters expect EPS ex items to fall 10% this year, to 53 cents, with revenue falling 9% to $4.52 billion. Yahoo has recently implemented layoffs and begun the process of selling itself and spinning off its hefty stake in China e-commerce giant Alibaba Group ( BABA ). It’s also in the midst of a proxy fight initiated by activist investor Starboard Value seeking to oust Yahoo’s entire board and CEO Marissa Mayer. Yahoo’s revenue growth has stalled for nearly a decade as ad dollars continue to slip away to rivals, including Facebook ( FB ), Netflix ( NFLX ), Google and others, as well as high-profile startups Snapchat and Pinterest. Yahoo stock was down more than 1% in midday trading in the stock market today , near 36. Verizon stock was up a fraction.

Disney Buying Netflix Would Solve Problems, Greenfield Suggests

Walt Disney ( DIS ) could solve a couple of problems if it acquired streaming video leader Netflix ( NFLX ), maverick Wall Street analyst Richard Greenfield said Friday in a blog post. Disney CEO Bob Iger is facing two big concerns: succession planning and the erosion of its ABC and ESPN broadcast businesses, Greenfield said. Iger is scheduled to retire in 2018, but he is without an heir apparent after the surprise departure this week of Chief Operating Officer Thomas Skaggs. Meanwhile, the company’s cable and broadcast businesses are facing a loss of viewers who are shifting more to on-demand Internet video services like Netflix. ESPN in particular is in trouble because it overpaid for NBA and other sports broadcast licenses before subscriber losses from cord-cutting became apparent, Greenfield said. Acquiring Netflix would give Disney a foothold in on-demand video distribution and a future leader in Netflix CEO Reed Hastings, Greenfield said. “Netflix is already a great friend of Disney,” Greenfield said. “In fact, Iger has repeatedly acknowledged how they are in part responsible for Netflix’s success. … Disney continues to sell more and more content to Netflix spanning movies and television series, while at the same time struggling to get their own direct-to-consumer content business off the ground in the U.K.” Netflix wouldn’t come cheap. The firm has a market capitalization of $44 billion vs. $157 billion for Disney. And Greenfield wonders whether Disney’s board would make such a bold acquisition. “We doubt Disney’s board comprehends just how much trouble their broadcast/cable network assets are facing to seek a transaction so near-term dilutive as Netflix, especially given the incredible success they are having contentwise in 2016,” he said. If Disney acquired Netflix, it could offer subscribers a bundle of on-demand video from Netflix and live sports from ESPN. “Combining Disney and Netflix effectively re-creates the best of the legacy video bundle, removes the distributor, packaging together great content with best-in-class technology spanning all devices consumers love to use,” he said. In midday trading in the stock market today , Disney was down a fraction, near 96, and Netflix was down more than 1%, near 103.