Author Archives: Scalper1

Another Example Of The "New" Microsoft Corporation

One of Satya Nadella’s objectives when he took the helm of Microsoft in Feb. of 2014 was to change its culture and, by extension, its less than flattering image. By the time Nadella was named

Have Copper ETFs Finally Bounced Back?

Copper prices underwent a stressful stretch for quite some time on a soft manufacturing sector in China, global growth worries, a stronger U.S. dollar and surplus supplies. The trouble deepened in 2015 as the greenback continued to gain strength on rising rate speculations in the country (read: Copper ETFs Tumble on China Growth Concerns ). However, the metal bucked the trend at the start of 2016 as the greenback softened slightly on tepid U.S. growth. Also, policy easing in China favored this struggling commodity. Notably, in a move to boost a waning economy, the People’s Bank of China (PBOC) cut reserve requirement ratio (Pending: RRR ) by 50 bps to 17% for all banks effective March 1 (read: ETFs to Gain from China’s Added Stimulus ). Now China matters the most for this metal as the country is the world’s biggest consumer of this industrial metal, accounting for roughly 40% of global copper demand. Also, the red metal has been witnessing shortage of supplies lately. In Chile – one of the key copper producing nations – copper output fell 14% year over year in January, marking the largest decline in a month in about five years. Not only this, production is expected to be on the subdued side even in February, per the sources . The reason for the output decline was worsening ore grade and reduced investment in the mining and power industries, per Reuters . All in all, analysts believe that ‘the commodities rout may be over’. While many are overseeing a likely decline in global output, the demand scenario is apparently firming. As per sources, China’s copper imports in February represented a 49% jump year over year. While this is clearly good news for those who are holding onto copper ETNs such as iPath Bloomberg Copper Subindex Total Return ETN (NYSEARCA: JJC ) — price of which has grown over 11.6% in the last one-month period – copper mining equities and the related ETFs became the biggest beneficiaries. Global X Copper Miners ETF (NYSEARCA: COPX ) – which tracks the Solactive Global Copper Miners Index – advanced over 44% in the above-mentioned period (as of March 10, 2016). Though a subtle turnaround can be noticed in the operating backdrop, copper exchange-traded products have a long way to go for solid improvement. As of now, ‘ Deutsche Bank analysts expect small surpluses this year and in the next, along with a deficit of 280,000 tons in 2018, 350,000 in 2019 and 280,000 in 2020’. So, investors can have a neutral outlook on copper-related exchange-traded products as indicated by a Zacks ETF Rank #3 (Hold) on JJC which has a High risk outlook. Link to the original article on Zacks.com

Groupon Could Get More Users From Facebook In New Social Media Push

Groupon ‘s ( GRPN ) pledge to trim down and over-deliver as it transforms its operations drew praise Tuesday from investment bank William Blair. Groupon interim CFO Brian Kayman and investor relations chief Tom Grant said in meetings with William Blair last week that the company “had a tendency to ‘get ahead of its skis’ in terms of priorities and financial targets,” wrote analyst Ralph Schackart. That “overly-broad approach … led to some mis-execution,” Schackart said. “Going forward, the company is focused on executing against a narrower set of priorities to regain investor confidence, and it is attempting to set less ambitious guidance targets.” In a restructuring expected to be completed by September, Groupon is shutting down in unprofitable countries and scaling back low-margin goods. Groupon reported Q4 earnings that beat consensus, Schackart said, and now Groupon shares “are up 35% year-to-date — the highest of any company on our coverage list.” But it’s now up just 25%, with Groupon stock down 7% in midday trading in the stock market today , near 3.80. Schackart said “the company will need to show consistent execution against stated guidance for multiple quarters to regain increased investor confidence.” William Blair maintained a market perform rating on Groupon stock. Will Groupon’s Marketing Spend Produce Results? A key focus for investors is Groupon’s $150 million to $200 million incremental marketing investment for 2016, he said, especially since executives “noted that price, frequency and active customers are the three primary revenue drivers, and the incremental marketing spending will be focused on adding new customers.” On Tuesday, Groupon announced a series of website, mobile and tablet enhancements designed to make it easier for merchants to track and manage their Groupon campaigns. Groupon’s plans to use social media and search engine marketing in new ways drew praise. “For example, it might target people on Facebook ( FB ) who do not have the Groupon app with a mobile installation advertisement or bid on higher-level search words than in the past,” Schackart wrote. Other analysts have been more skeptical. “While Groupon has recently shown signs of progress in its transformation to an e-commerce marketplace and its core initiatives (including streamlining its international operations or customer acquisition), we believe there is still a long road ahead in strengthening the company’s positioning in the local ad and/or local e-commerce market,” wrote UBS analyst Eric Sheridan in an industry note on March 9. “Meanwhile, larger Internet companies, predominantly Alphabet ( GOOGL ) subsidiary Google and Facebook, are increasing their efforts to capture local ad dollars, while Amazon ‘s ( AMZN ) same-day delivery service reduces the benefit of a local marketplace.” Sheridan downgraded Groupon to sell from neutral and set a price target of 3.20. Sheridan sees several “key weaknesses” in Groupon’s competitive position, including marketing spend that will pressure near-term margins, rising competition, a shift to lower-margin business and slowing customer and engagement growth. Sheridan blamed those troubles on Groupon’s international retrenchment and its “lack of operating profit scale to drive additional investments in innovation that might counteract the platform strength of Google and Facebook.” Groupon’s changes come as others are also tweaking their strategies. Last week, Angie’s List ( ANGI ) got a revenue outlook boost from Pacific Crest Securities, which praised the online review site’s recent decision to drop its current membership model and replace it with free access to its business ratings and reviews as part of a tiered subscription plan. The addition of the free tier “should reignite user growth,” wrote Pacific Crest analyst Evan Wilson in a research report last week.