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  • Will Cree Acquire Philips' Soon-To-Be Spun-Off LED Business?
    Tue, Jul. 8 CREE 11 Comments

    Summary

    • Earlier this week, the world’s largest lighting producer Philips announced its plan to spin-off its Lumileds LED lighting unit and automotive lighting segment into a separate company by early 2015.
    • Philips believes that after significantly improving the performance of Lumileds over the last few years, and establishing strong intellectual property, the business can further grow, attract more customers and increase scale as a standalone company by increasing sales to customers who currently view Philips as a rival.
    • Though the move intensifies competition for Cree (CREE), the news led to a marginal upsurge in its stock price (~5% increase) backed by rumors that Philips could try and merge the spun-off unit with Cree.
  • What's Driving Sirius XM's Average Revenue Per User?
    Mon, Jul. 7 SIRI 20 Comments

    Summary

    • Sirius XM's (SIRI) average annual revenue per customer for satellite radio subscription is derived from total earned subscriber revenue and net advertising revenue, divided by the daily weighed average number of subscriptions for the period.
    • From $103 in 2007, the company’s average revenue per user (ARPU) declined to $83 in 2008 primarily due to the Sirius and XM merger, which resulted in 100% rise in subscriber base, but just 81% growth in revenues.
    • Change in mix of discounted OEM promotional subscriptions, subscription win-back programs, second subscribers and a decline in net advertising revenue per subscriber were also responsible for this decline.
  • About 10% Upside If Twitter Fills The Monetization Gap Between Itself And Facebook
    Mon, Jul. 7 TWTR 11 Comments

    Summary

    • Twitter (TWTR) is doing well in terms of growing its monetization, thanks to impressive ROI (return on investment) that advertisers are getting on its platform.
    • Twitter has been investing significantly in marketing, and has already developed rapport with major brands and advertisers.
    • However, when compared to Facebook, Twitter still lags significantly in terms of monetization efficiency.
    • If it can match Facebook, our price estimate can go up by 10%.
  • Johnson & Johnson's Growth Avenues
    Thu, Jul. 3 JNJ 2 Comments

    Summary

    • J&J's drug sales have registered a phenomenal growth in recent quarters with consumer segment doing better due to improvements in supply chain and manufacturing.
    • Oncology, or cancer therapeutics, is one of the key growth segments for J&J and for the pharmaceutical industry in general.
    • However, uncertain currency fluctuations, generic competition and pricing pressure in medical devices industry remain the primary risks.
  • Bristol-Myers Squibb May Be Fast-Tracking Its Promising Cancer Drug
    Thu, Jul. 3 BMY 10 Comments

    Summary

    • Bristol-Myers Squibb appears to be fast-tracking the development of its breakthrough immuno-oncology drug, Nivolumab.
    • The Phase 3 clinical trials were earlier expected to run into the second half of 2015.
    • However, with the recent release of promising data and the early termination of the first batch of Phase 3 trials, the drug may hit the market sooner than expected.
  • Broadcom Aims To Be An Early Entrant In The Booming Wearable Technology Market
    Wed, Jul. 2 BRCM 2 Comments

    Summary

    • Last month, Broadcom (BRCM) announced its intention to exit the cellular baseband business on account of the intense competition in the market.
    • Broadcom intends to instead increase its focus and competitiveness in the broadband, infrastructure and connectivity businesses.
    • In this article, we discuss the growth opportunities in the wearable technology space (part of IoT), and recent steps taken by Broadcom to leverage the growth potential in the market.
  • HP Improves Its Cloud Offering With SAP-HANA SaaS
    Wed, Jul. 2 HPQ 1 Comment

    Summary

    • Technology giant, Hewlett-Packard (HPQ), has been restructuring its business to boost profitability and focus on new verticals that offer better growth opportunity.
    • As part of this strategy, the company is continuously expanding its portfolio of cloud services.
    • If HP can capture 5% of the expected $44 billion PaaS market, the revenue for this division can be significantly higher.
  • Security Concerns Put IBM / Lenovo x86 Server Deal In Limbo
    Tue, Jul. 1 IBM, LNVGY 4 Comments

    Summary

    • News has emerged that the latest deal between IBM and Lenovo is in limbo following the U.S. government's security concerns over IBM's x86 servers.
    • The servers are extensively used in the country's communications networks and in data centers that support the Pentagon's computer networks.
    • IBM and Lenovo faced a similar situation in 2005 when Lenovo bought IBM's personal computer business.
  • Is Lexmark's Revised Bid For ReadSoft Justified?
    Tue, Jul. 1 LXK 3 Comments

    Summary

    • The company had to raise its offer to 43 Swedish kronor ($6.46) a share from its May offer of 40.50 kronor due to competitive bidding from Hyland Software U.K. Ltd. on June 18.
    • ReadSoft not only adds account payable process automation to Perceptive's portfolio, but also increases its reach to the rapidly expanding document business process solutions footprint in EMEA.
    • We believe that ReadSoft's shareholders will most likely accept Lexmark's offer.
  • First Solar: Funding For The Luz Del Norte Project Was Approved
    Tue, Jul. 1 FSLR 3 Comments

    Summary

    • The 141 megawatt project would be Latin America's largest photovoltaic solar power plant and will be the first of several projects that First Solar has in its development pipeline in the region.
    • The Chilean government intends to beef up the country's renewables capacity so that it accounts for about 20% of total generated power by 2025.
    • Given the strong energy demand and economic rationale, we believe that Chile could be an important growth market for solar companies in the long run.
  • Salesforce Ventures Into Patient Relationship Management With Royal Philips Alliance
    Mon, Jun. 30 CRM 2 Comments

    Summary

    • The 'New Industries Strategy' is designed to help businesses derive greater value from their customer relationship management suites by deploying specific Salesforce CRM solutions.
    • During the announcement, the company announced that it expects significant demand for such customized solutions from six industry groups globally.
    • Recently, Salesforce announced a strategic alliance with Dutch-based technology solutions company, Royal Philips, to deliver an open, cloud-based healthcare platform.
  • Applied Inches Closer To Merging With Tokyo Electron
    Mon, Jun. 30 AMAT Comment!

    Summary

    • Applied Materials’ stockholders approved its merger with Tokyo Electron, earlier this week.
    • Applied expects the transaction to close in the second half of the year, subject to customary conditions, including regulatory reviews in various countries.
    • With an estimated value of $29 billion, the combined entity aims to become a global innovator in semiconductor and display manufacturing technology.
  • Can Amazon's Management Portal For vCenter Halt VMware's Growth?
    Mon, Jun. 30 AMZN Comment!
  • Yahoo Collates Technology From Acquisitions To Strengthen Its Offering
    Mon, Jun. 30 YHOO Comment!

    Summary

    • Yahoo! (YHOO) is increasingly launching new products to boost its floundering online ads business.
    • In order to increase user count, Yahoo started offering customized content to individuals based on their search history and sharing patterns on social media.
    • If the number of unique visitors to Yahoo properties reached 1 billion per year, as a result of product launches and improved content, this would increase our price estimate by 5%.
  • Nvidia Refocuses Its Plan To Target Servers, Instead Of Promoting Its GPUs In ARM Servers
    Fri, Jun. 27 NVDA 3 Comments

    Summary

    • Three years after officially launching its server Project Denver, Nvidia is downplaying its plan to develop its own 64-bit ARM-based CPU processor for servers.
    • ARM processors can help cut down on power consumption as they are known for their low power processors.
    • AMD believes that ARM CPUs have the potential to account for 20% of the server market by 2016 or 2017.
  • What If Legacy Pharmaceutical And Consumer Business Keeps Falling For Merck?
    Fri, Jun. 27 MRK 14 Comments

    Summary

    • Merck's legacy products are facing declining revenues due to competitive pressure from generics.
    • To offset weakness in its legacy products and some other drugs, Merck is banking on its R&D pipeline.
    • Merck recently announced a definitive agreement to acquire Idenix at $24.50 a share for cash, offering a hefty premium of about 240% over last Friday's (i.e. June 6th) closing price.
  • Trina Solar Revised To $14 On Cost And Market-Related Concerns
    Fri, Jun. 27 TSL 4 Comments

    Summary

    • After witnessing nearly two years of losses, Trina Solar has posted three consecutive quarters of profitability.
    • However, despite the better performance, we believe the company faces some risks in driving its earnings growth.
    • The risks include escalating costs, sluggish improvements to manufacturing technology and demand-related uncertainty in a few key markets.
  • Key Trends Impacting Expedia's Hotel Division
    Fri, Jun. 27 EXPE 2 Comments

    Summary

    • Expedia registered a robust 25% and 23% rise in hotel gross bookings in 2012 and 2013, respectively, as travelers switched from traditional methods to online for reservations.
    • While we expect the hotels division to register healthy growth in bookings, we estimate that its revenue margins will decline.
    • This will be attributable to faster growth in agency model bookings as compared to merchant model bookings.
  • All-Flash Arrays Offer Strong Opportunity For NetApp Despite Competition
    Thu, Jun. 26 NTAP 1 Comment

    Summary

    • At the end of 2012, NetApp was the third-largest player in the all-flash storage array market behind Violin Memory and IBM.
    • NetApp launched its all-flash array, EF550, at the end of 2013 in an attempt to compete with upcoming and existing storage manufacturers.
    • According to an IDC report, the SSA market is likely to grow at a CAGR of 34% through 2015 to become a $1.2 billion market.
  • AMD Expands Its Professional Graphics Portfolio To Increase Its Footprint In The Market
    Thu, Jun. 26 AMD 12 Comments
  • Intel Raises Its Q2'14 Outlook On Account Of Improving PC Demand
    Thu, Jun. 26 INTC 4 Comments
  • Let's Not Discount Zynga's Mobile Efforts
    Wed, Jun. 25 ZNGA 11 Comments

    Summary

    • The gaming company has managed to grow its mobile users sequentially in recent quarters, which is an encouraging sign.
    • In the first quarter of 2014, Zynga's monthly audience went up by 10% whereas its daily audience saw growth of roughly 7% over the fourth quarter of 2013.
    • Our current price estimate for Zynga stands at $3.33, implying a premium of about 10% to the market price.
  • China Unicom Leads The Chinese Wireless Market In Net Subscriber Adds
    Wed, Jun. 25 CHU Comment!

    Summary

    • China Unicom‘s consistent gains in the Chinese wireless market continued in May, as it added over 3.3 million high-speed (3G & 4G) subscribers, taking its total 3G/4G subscriber count to about 138 million.
    • China Unicom’s performance was dwarfed by market leader China Mobile, which gained over 7.6 million high-speed subscribers in the same period.
    • However, if we include the carrier’s 2G user losses (~5 million), China Unicom was ahead of the market leader in net additions by 21,000 last month.
    • Going forward, we expect China Unicom to continue its consistent monthly subscriber additions on account of its competitive plan tariffs and fast HSPA+ 3G network.
  • Pfizer's Plan B In Immuno-Oncology: Collaboration With Smaller Companies
    Wed, Jun. 25 PFE 8 Comments

    Summary

    • Competitors such as Merck and Bristol-Myers Squibb appear to have more promising immuno-oncology drugs under development, and that could impact Pfizer.
    • It makes sense for Pfizer to enter such collaborations, and perhaps even acquire smaller innovative biotech companies.
    • Acquiring companies rich in oncology drug pipelines or entering research and marketing collaboration also could help Pfizer get back on the growth track.
  • Sirius XM Turns To Used Car Market As New Car Market Matures
    Wed, Jun. 25 SIRI 20 Comments

    Summary

    • While Sirius XM's radio penetration in the new car market stands high at 70%, growth in this metric has slowed down in the last few years.
    • As the new car market matures, Sirius XM is turning its attention toward the used car market.
    • This market is turning attractive for Sirius XM and the penetration levels could rise in the future driven by the company's efforts to tap this opportunity.
  • Accenture Earnings Preview: Will Consulting Revenue Grow In Q3?
    Tue, Jun. 24 ACN Comment!

    Summary

    • Accenture is set to announce its Q3 FY2014 results on June 26.
    • In the previous quarter, the company delivered strong growth for its outsourcing division, which has outpaced the industry.
    • In this earnings announcement, apart from the growth in outsourcing division, we will closely monitor revenue from the consulting division, as it is critical for Accenture’s future growth.
    • Additionally, we will continue to observe the consulting order pipeline as it will give us a fair indication of whether global consulting demand is on the mend.
  • Micron Retains Its Growth Momentum In Q3 2014
    Tue, Jun. 24 MU 17 Comments

    Summary

    • Strong market demand and solid operational execution helped Micron Technology witness another quarter of strong growth in fiscal Q3 2014.
    • The company reported net sales of $3.98 billion, 72% higher than Q3 2013. Its net income increased from $43 million and $731 million in Q3 2013 and Q2 2014, respectively, to $806 million in Q3 2014.
    • Micron has performed strongly in the first three quarters of fiscal 2014 and is confident of retaining its growth momentum in the last quarter as well.
  • What Would Justify Netflix's Current Market Price?
    Mon, Jun. 23 NFLX 15 Comments

    Summary

    • Netflix's stock is currently trading at around $440, which is significantly ahead of our price estimate.
    • Netflix needs to grow its global streaming subscriber base to 110 million and increase average monthly revenue per subscriber to $10 over the next six years to justify its market valuation.
    • Netflix also will need to grow margins to around 40% over the course of the next five to six years.
  • What Are Lockheed Martin's Two Biggest Growth Opportunities?
    Fri, Jun. 20 LMT 5 Comments

    Summary

    • Lockheed Martin's 2013 top line fell by 4% annually to $45.4 billion due to the U.S. government’s across-the-board spending cuts, called sequestration.
    • Lockheed, which generates more than 80% of its revenues from government contracts, will likely be challenged in driving its growth.
    • We figure a ramp-up in the F-35 fighter jet’s production and international sales are the two biggest growth opportunities for Lockheed in the coming years.
    • We currently have a stock price estimate of $164 for Lockheed, approximately in-line with its current market price.
  • Micron's Earnings Preview: Improving Market Dynamics To Spur Growth
    Fri, Jun. 20 MU 6 Comments

    Summary

    • Micron has performed strongly in the first half of fiscal 2014 and is confident of retaining its growth momentum for the rest of the year.
    • Micron as well as other market players are focusing on leveraging their present technologies to deliver value-added devices to their customers.
    • Our price estimate of $22 for Micron is at a significant discount to the current market price.
  • BlackBerry's Amazon Appstore Deal Should Free Up Resources To Aid Enterprise Focus
    Fri, Jun. 20 BBRY 24 Comments

    Summary

    • The Appstore, which will be available on BB 10 devices this fall, will serve more than double the number of apps available to users of BlackBerry's newest devices.
    • The effort also will introduce several popular titles that were previously unavailable to BlackBerry users.
    • We see this as a positive for BlackBerry, since it should save the company the time and effort in courting developers to create more apps for its shrinking user base.
  • Nokia Looks To Bolster Its HERE Maps Business With Recent Buys
    Thu, Jun. 19 NOK 10 Comments

    Summary

    • The Finnish company acquired artificial intelligence firm Desti last month and announced its plans to buy predictive analytics company Medio Systems last week.
    • Nokia also launched a $100 million Connected Car Fund last month to identify and invest in companies which can help grow HERE's location and mapping ecosystem.
    • Although the division contributes only a fraction of its overall sales (~7%), the recent acquisitions suggest that Nokia is looking to add substantial value to its map offering.