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  • Oracle Q4FY14 Preview: New License Sales To Be Weighed Down By Weak On-Premise Application Sales
    Jun. 18, 2014 ORCL Comment!

    Summary

    • Revenues from software updates and support services continued to show promise in a weak IT environment, growing 6% to $13.5 billion.
    • For the nine months in FY14, Oracle’s hardware division reported flat sales at $3.9 billion on a year-on-year basis.
    • Oracle expects Q4FY14 revenues to grow between 3% and 7% on both GAAP and non-GAAP basis.
  • Microsoft Fairly Valued At $41
    Jun. 18, 2014 MSFT 12 Comments

    Summary

    • Microsoft shares have rallied nearly 20% in the last six months to close above $41 a share on June 16.
    • As a result, the market capitalization increased to $342 billion and the current market price is in line with our stock price estimate.
    • We believe that the stock is fairly valued and the upside potential for the company is limited.
  • Flash Storage Consolidation Continues With SanDisk's Fusion-io Acquisition
    Jun. 18, 2014 SNDK, FIO 5 Comments

    Summary

    • SanDisk Corporation recently announced its decision to buy Fusion-io for approximately $1.1 billion in an all-cash deal.
    • SanDisk is looking to beef up its enterprise storage offerings, as Fusion-io specializes in solid-state storage systems.
    • If the company’s SSD market share increases to about 15% by the end of our forecast period, it could imply a 7%-8% upside to our $86 price estimate for SanDisk.
  • Is Google Glass The Next Big Money Maker?
    Jun. 17, 2014 GOOGL, GOOG 13 Comments

    Summary

    • While the project is still in its early stages, we think that it is worth examining how this offering can be a game changer and money maker for Google.
    • If wearable eye-wear were to form 30% of the wearable tech industry, which also includes smartwatches and fitness and activity tracking bands apart from smart glasses, its market size can be estimated at $9 billion.
    • We believe that Google will have a first mover advantage, and can get a sizeable chunk of this market, which will meaningfully increase its top line in the future.
  • OpenTable's Acquisition Sparks Investor Interest In Groupon
    Jun. 17, 2014 GRPN 16 Comments

    Summary

    • The increased demand for the stock can be attributed to the perception that the acquisition is an acknowledgement of value in structured location based businesses.
    • The company sends 250 million emails everyday to its subscribers and this has helped it push upfront sales of groupons.
    • We believe that Groupon will not seek a buyer if it is able to turn around its business.
  • Electronic Arts: FPS Games To Drive Market Share
    Jun. 17, 2014 EA Comment!

    Summary

    • The highlight for EA at this year's E3 convention were action role playing and first person/third person shooter (FPS) games.
    • Gamers are drifting more toward shooter games, evidenced by the fact that shooter games accounted for 14% of total game sales in 2013.
    • EA is trying to strengthen its share in the FPS segment through its Titanfall and Battlefield titles.
  • VMware And Cisco To Fight It Out In The SDN Arena
    Jun. 17, 2014 VMW, CSCO 6 Comments

    Summary

    • The battle between once-partners VMware and Cisco seems to be heating up in the software-defined networking (SDN) domain, with VMware announcing its NSX licenses to be sold via channel partners.
    • Before launching the NSX platform in October, VMware management stated that the company does not intend to harm its partnership with networking giant Cisco by launching competing SDN products.
    • We forecast VMware’s average price per license to grow to about $5,300 per license by the end of our forecast period.
  • What Tesla Stands To Gain From Sharing Its Patents
    Jun. 16, 2014 TSLA 25 Comments

    Summary

    • On June 12 2014, Tesla Motors‘ CEO, Elon Musk, wrote a blog stating that the company would not initiate lawsuits against anyone who wishes to use their technology in good faith.
    • The automaker has already been engaged in partnerships with other vehicle manufacturers like Toyota and Daimler.
    • If the move is successful, it could lead to advantageous network effects for the company.
  • Monster Is Rejuvenating
    Jun. 16, 2014 MWW Comment!

    Summary

    • We believe that aggregating social profiles and jobs will help Monster in expanding its scope significantly and better match employers with job seekers.
    • LinkedIn has changed the rules of the game, Monster needs to become more data centric, run efficient algorithms and redesign its user interface to better target the talent acquisition market.
    • The spur in economic activity will help Monster expand its recruitment business.
  • Samsung Launches Premium Tablets, But Going After Apple's Market Share Could Be A Challenge
    Jun. 16, 2014 SSNLF 5 Comments

    Summary

    • Samsung's new tablets may not contribute significantly to the bottom line given the possible high manufacturing costs and competition from Apple's iPad.
    • The high-end of the smartphone and tablet market is all about the margins.
    • Additionally, the company's marketing and promotional costs for the device could also be significant.
  • Facebook Ad Revenue May Get Boost With More Relevant Ads
    Jun. 13, 2014 FB 9 Comments

    Summary

    • Facebook has announced its plans to expand its ad targeting capabilities by utilizing user data generated outside its own platform.
    • The bigger picture is that users are going to see more relevant ads targeting their interests that Facebook’s platform alone fails to capture.
    • We currently forecast Facebook’s average revenue per 1,000 page views to increase from $0.42 in 2013 to $1.02 by the end of our forecast period.
  • Applied To Gain As Foundry And NAND Lead Capacity Expansion In The Semiconductor Market
    Jun. 13, 2014 AMAT 3 Comments

    Summary

    • On account of lower capital spending in the cyclical industries it serves, Applied Materials' revenue and net income have been under pressure over the last three years.
    • The company’s revenue base declined from $10.5 billion in fiscal year 2011 (ending in October) to $7.4 billion in fiscal year 2013.
    • Applied started its fiscal 2014 on a strong note, with a 39% and 19% annual growth in Q1 2014 and Q2 2014 revenues, respectively, backed by stronger investment from its semiconductor and display customers.
  • Seagate's Latest Acquisition Adds To Flash Storage Consolidation
    Jun. 13, 2014 STX 3 Comments

    Summary

    • At the end of May, Seagate announced the acquisition of the flash business from networking semiconductor and chip manufacturer Avago Technology for $450 million.
    • The flash business is crucial to Seagate because of an increasing mix of solid state drives, which use flash components, compared to traditional hard disk drives.
    • The acquisition continues the trend of consolidation across the storage industry, with major storage companies acquiring smaller specialist manufacturers.
  • Amazon Strengthens Its Prime Service With Song
    Jun. 13, 2014 AMZN 18 Comments

    Summary

    • Amazon recently announced that its Amazon Prime customers will now have unlimited access to more than 1 million songs.
    • Expanding Amazon Prime will help boost the retailer's sales and margins, as Prime customers tend to purchase more frequently than others.
    • We estimate that Amazon Prime customers would have accounted for roughly 14%-15% of overall purchases in 2013.
  • Juniper Collaborates With Aruba To Expand Converged Networking Solutions Portfolio
    Jun. 13, 2014 JNPR, ARUN 1 Comment

    Summary

    • In a bid to enhance product innovation for solving complex enterprise problems, both companies agreed to collaborate not only at the product development stage, but also in taking products to the market by leveraging their client relationships and reseller networks.
    • The deal is likely to help Juniper expand it’s WLAN business and also offer flexibility to customers in deploying best-of-breed network solutions.
    • Although Aruba will be the expert Wi-Fi provider in this newly formed partnership, Juniper’s WLAN business could also get a boost.
  • Roche's Purchase Of Genia A Long-Term Move
    Jun. 12, 2014 RHHBY Comment!

    Summary

    • The company is hopeful that by leveraging Genia's technology, it will be able to bring the cost of DNA sequencing down and at the same time improve its speed and sensitivity.
    • If DNA sequencing helps Roche in developing 1-2 targeted drugs for cancer and other serious illnesses, the incremental sales could be significant.
    • The broader attempt appears to be toward strengthening the diagnostics business and gain share as Johnson & Johnson falters in this market.
  • U.S. Airlines Expand Flying Capacities Supported By Solid Demand Environment
    Jun. 12, 2014 AAL, DAL, UAL 5 Comments

    Summary

    • The overall demand for air travel was robust with strong growth in the Latin American markets, and moderate growth in the domestic U.S. and Atlantic international air travel markets.
    • Last quarter, airline results were a mixed bag due to the negative impact from severe weather that disrupted normal flight operations in the northeast and mid-continental U.S.
    • This growth oriented capacity stance of major airlines is a reflection of the improved health of the U.S. airline industry.
  • Sprint Eyeing $32 Billion T-Mobile Deal
    Jun. 11, 2014 S, TMUS 3 Comments

    Summary

    • Sprint, T-Mobile have reached tentative acquisition deal, according to reports.
    • Under preliminary terms of the reported deal, Sprint is likely to pay around $40 per share for T-Mobile, valuing the company’s equity at close to $32 billion.
    • Sprint would also assume T-Mobile’s net debt of about $9 billion, adding to its ever-burgeoning debt load, which at the end of Q1 2014 was $26.6 billion.
  • Why Did Merck Pay Such A Huge Premium For Idenix
    Jun. 11, 2014 MRK 6 Comments

    Summary

    • Merck recently announced a definitive agreement to acquire Idenix at $24.50 a share.
    • The acquisition will strengthen Merck's Hepatits C portfolio and help it stem the revenue decline resulting from patent expiry of major drugs.
    • Idenix currently has three Hepatitis C drugs under development.
  • Boston Scientific Initiates New Evaluation Study For Its Lotus TAVR System
    Jun. 11, 2014 BSX Comment!

    Summary

    • The RESPOND Registry will collect performance data on the company's Lotus TAVR system implanted in 1,000 patients across 50 centers globally.
    • The study follows the successful completion of its REPRISE II clinical trial, which reported strong performance results for the TAVR system in terms of safety and efficacy.
    • The Lotus TAVR system reported solid uptake in Q1 this year and positive results from the RESPOND Registry could further aid its acceptance.
  • First Solar Could Benefit If India Imposes Duties On Cell Imports
    Jun. 11, 2014 FSLR 1 Comment

    Summary

    • India's Directorate General of Anti-Dumping and Allied Duties recommended anti-dumping duties on the import of solar cells from China, United States, Taiwan and Malaysia.
    • U.S. silicon-based solar manufacturers could see the cost of their panels rise by as much as 80% (on average), while Chinese suppliers could see their prices more than double.
    • The proposed duties on First Solar's thin-film panels are far lower, standing at around $0.11 per watt.
  • F5 Expands Its Security Portfolio With Defense.Net
    Jun. 10, 2014 FFIV Comment!

    Summary

    • Last month, F5 Networks acquired Defense.Net.
    • The combined portfolio of the two companies will provide customers with the most comprehensive hybrid Distributed Denial-of-Service (DDoS) solution.
    • Though the acquisition is not expected to have a material impact on F5’s operating results, it helps the company by increasing its competitiveness in the fast growing security market.
  • Accenture-HP-SAP Collaboration Should Drive HANA Adoption Higher
    Jun. 10, 2014 SAP Comment!

    Summary

    • SAP HANA, short for High Performance Analytic Appliance, is the company's flagship in-memory database product launched in November 2010.
    • The collaboration with HP and Accenture is a strong attempt from SAP to push forward with its HANA platform as the de-facto industry standard for in-memory application deployments.
    • HANA has seen good traction, with fiscal 2013 revenues reaching approximately €664 million (~$882 million).
  • Wal-Mart Expects 30% Rise In Its E-Commerce Revenues This Year
    Jun. 9, 2014 WMT 4 Comments

    Summary

    • Wal-Mart’s comparable sales growth has been negative for the past five quarters due to the sluggish economic environment in the U.S.
    • However, the company’s e-commerce revenues have grown at a robust pace driven by several initiatives deployed over the last few years.
    • Wal-Mart believes that it can deliver 30% e-commerce revenue growth this year.
  • Microsoft Targets Enterprise Clients With Strategic Salesforce.com Partnership
    Jun. 9, 2014 MSFT, CRM 7 Comments

    Summary

    • The effort includes Salesforce.com's CRM app on Microsoft's Windows and Azure platforms, and interoperability between Salesforce.com's SaaS applications and Microsoft Office 365.
    • We believe Microsoft is strategically positioned to target enterprise clients since corporations around the world continue to favor Windows as their Operating System.
    • Moreover, Salesforce's CRM delivered through cloud resonates well with small and medium enterprises that lack dedicated hardware budgets to complement on-premise CRM bundles.
  • Why Qualcomm's Royalty Rate Will Continue To Decline
    Jun. 9, 2014 QCOM 22 Comments

    Summary

    • Qualcomm is the leading patent holder in advanced 3G mobile technologies, which has allowed the company to charge high royalty rates in the past.
    • The average royalty rate that Qualcomm charges mobile handset vendors has declined gradually over the past few years, as the average selling price of CDMA mobile phones continue to decline.
    • The company's average royalty rate of mobile devices based on its technology declined from 4.3% in 2008 to 3.2% in 2013, we estimate the figure to continue declining.
  • RadioShack's Earnings Preview: No Significant Benefit From Its Turnaround Initiative Yet
    Jun. 6, 2014 RSH 4 Comments

    Summary

    • RadioShack will report its Q1 2014 earnings on June 10.
    • The company is witnessing an eroding top line growth, declining gross margins, high inventory levels, a string of debt maturities and declining cash reserves.
    • We do not expect the company to report any significant improvement in earnings.
  • Nvidia's Tegra K1 Powers Google's Project Tango Tablet Kit
    Jun. 6, 2014 NVDA Comment!

    Summary

    • Project Tango is a smartphone and tablet project by Google powered by Nvidia.
    • We believe that Tegra processors revenue will cross $1 billion over our review period.
    • Leveraging its Tegra processors to tap growth in mobile computing is a key long-term growth strategy for Nvidia.
  • A Look At BlackBerry's QNX Business
    Jun. 6, 2014 BBRY 142 Comments

    Summary

    • There has been a lot of buzz around the company's sometimes overlooked QNX embedded systems business.
    • While BlackBerry has used QNX to power its Playbook line of tablets and build its BB10 operating system, the software's primary application lies in embedded systems.
    • We take a look at where the QNX business currently stands and its potential opportunities and risks.
  • Rising Competition Forces Broadcom To Exit The Baseband Market
    Jun. 5, 2014 BRCM Comment!

    Summary

    • Broadcom announced that it has engaged investment bank JPMorgan to explore strategic alternatives for its cellular baseband business, including a potential sale or wind-down.
    • The company expects the sale or wind-down of its cellular baseband business to result in a $700 million reduction in annualized GAAP research and development (R&D) and selling, general and administrative (SG&A) expenses.
    • Broadcom accounts for less than 3% of the mobile baseband and application processor market.
  • How Johnson & Johnson Is Executing Well
    Jun. 5, 2014 JNJ 3 Comments

    Summary

    • J&J has traditionally been known for its medical devices and diagnostics equipment, but that is slowly changing.
    • Growth in the consumer and medical devices business is flattening out whereas certain therapeutic areas such as oncology and immunology offer attractive growth opportunities for the company's drugs.
    • There is a good chance that the company will continue to downsize its consumer and medical devices businesses and focus more on the growing pharmaceutical segment.
  • Decoding Yahoo's Foray Into Online Videos
    Jun. 5, 2014 YHOO 4 Comments

    Summary

    • If recent news can be believed, then Yahoo is all set to launch a new video service that will compete with Google’s YouTube.
    • Due to launch this summer, the new video site will focus on attracting user generated content through a greater potential to earn money.
    • We currently have a $34.83 price estimate for Yahoo!, which is in line with its current market price.