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  • Best Buy Reports Positive Results Too, But Remains Cautious About FY'16
    Tue, Jan. 20 BBY Comment!

    Summary

    • Best Buy came out yesterday with their holiday sales numbers and reported a 2.1% growth in enterprise sales and a 2.6% domestic comparable sales increase, excluding the 80-basis point estimated benefit of installment billing.
    • The growth was driven by increased online traffic and higher conversion rates.
    • A sharp decline of 14% in BBY’s stock places our price estimate of $33 at an approximate 5% discount to the current market price.
  • Intel Reports A Strong 2014, Though Weak Gross Margin Outlook Disappoints Investors
    Fri, Jan. 16 INTC 7 Comments

    Summary

    • At $14.7 billion, Q4 2014 revenue was in line with company as well as analyst expectations.
    • Gross margin (65.4%) in the quarter grew 0.4 percentage points sequentially and 3.4 points year to year.
    • Still, Intel expects gross margin to decline to 60% for Q1 2015.
  • F5′s Q1'15 Earnings Preview: Fiscal 2015 Will Be Another Year Of Strong Growth & Profitability
    Fri, Jan. 16 FFIV Comment!

    Summary

    • F5′s stock price increased almost 30% in the last year.
    • The company is set to report its Q1 2015 earnings on January 21st.
    • Our price estimate of $124 for F5 Networks is in line with the current market price.
  • Why Acquiring BlackBerry Would Make Sense For Samsung
    Fri, Jan. 16 SSNLF, BBRY 108 Comments

    Summary

    • By acquiring BlackBerry, Samsung could find new avenues for growth, gaining credibility and deeper relationships with enterprise customers and users in highly regulated verticals.
    • BlackBerry could help to give Samsung a leg up over Apple and Android devices, which still trails behind BlackBerry in terms of security.
    • BlackBerry’s basic patents, which are likely to cover some foundation mobile communication technologies, could prove useful as a bargaining chip for Samsung in the event of litigation with rival manufacturers.
  • eBay Earnings Preview: Marketplaces Segment Could Continue To Drag Earnings
    Fri, Jan. 16 EBAY 5 Comments

    Summary

    • Though we expect eBay's payments division PayPal to report strong growth, its marketplaces segment is likely to show sub-par growth.
    • This, in all likelihood, could be due to the continued impact of the security breach and changes in the Google SEO algorithm.
    • We also expect eBay to face profitability pressure during the fourth quarter due to a surge in sales and marketing expenses to curb the fall in traffic on eBay's marketplaces.
  • Citigroup Avoids Q4 Loss As Trading Slump, Legal Charges Hurt Results
    Fri, Jan. 16 C 2 Comments

    Summary

    • Citigroup saw its shares tank nearly 4% over trading on Thursday, January 15, after the globally diversified banking group failed to meet the already low expectations investors had for its Q4 results.
    • While investors also expected a poor showing by the bank’s fixed income trading desk, the actual performance turned out to be much worse than anticipated.
    • To make things worse, Citigroup’s top line was also hit by unfavorable exchange rate movements, which dragged down an otherwise strong operating performance by its global consumer banking arm.
  • AMD: Q4'14 To Be Weak But 2015 Looks Promising
    Thu, Jan. 15 AMD 23 Comments

    Summary

    • AMD will report its Q4 2014 earnings on January 20th.
    • AMD’s stock price has declined by approximately 40% in the last six months.
    • Our price estimate of $4.12 for AMD is at a more than 50% premium to the current market price.
  • Symantec Acquires Boeing's Cyber Security Unit In A Bid To Boost Big Data Capabilities
    Wed, Jan. 14 SYMC Comment!

    Summary

    • Narus, which was acquired by Boeing in 2010, specializes in internet-filtering software for intelligence agencies.
    • Symantec has indicated that it hopes to utilize Narus for big data analytics to prevent, detect and remediate cyber attacks.
    • Symantec derives 62% of revenues from the information security business, comprising of 43% from consumer information security and 19% from enterprise information security.
  • Priceline: Key Strategic Moves In 2014
    Tue, Jan. 13 PCLN 4 Comments
  • Why Samsung Is Betting Big On The Internet Of Things
    Tue, Jan. 6 SSNLF 3 Comments

    Summary

    • Samsung intends to play a key role in the IoT market, with the intention to equip 90% of all its devices with IoT capabilities by 2017.
    • According to research firm IDC, the global market for Internet of things-capable devices and services could cross $7 trillion by the year 2020.
    • Trefis has a $1170 price estimate for Samsung, which is slightly below the current market price.
  • Symantec's Revival: The Security Business Holds The Key
    Sun, Jan. 4 SYMC 1 Comment

    Summary

    • In this article, we will provide a brief overview of the major events during the year and examine why Symantec's security business is the key to its revival in the post-restructuring era.
    • The highlight of the year was Symantec's announcement of its plan to split its security and information management businesses into two separate, publicly traded companies.
    • Splitting off the information management business into a separate company will yield several advantages that will allow Symantec to efficiently capitalize upon the opportunities in the information security business.
  • AMD: 2014 Recap And What To Expect In 2015 And Beyond
    Sun, Jan. 4 AMD 30 Comments

    Summary

    • AMD continues to struggle in the Computing and Graphics business due to ongoing weakness in the consumer PC market. The company lost some market share to Intel (Bay Trail) in 2014.
    • AMD believes that its increasing focus on the commercial PC segment will help it improve its performance in this segment.
    • The embedded market is a very competitive market and AMD's strategy is to play to its strengths.
    • AMD is diversifying its semi-custom business beyond gaming, and claims that the semi-custom design win pipeline remains strong. It expects this division to be an important source of revenue for the company in the future as well.
  • A Look At BlackBerry's Deals And Acquisitions In 2014
    Dec. 31, 2014 BBRY 37 Comments

    Summary

    • The company's Movirtu acquisition complements its efforts in the mobile device management space, and will be an extension of BlackBerry's existing technology offerings.
    • The Secusmart acquisition will allow BlackBerry to offer end-to-end security protection, given that it will now have control of hardware, operating system, device management and security technology.
    • With its Amazon Appstore agreement, BlackBerry has more than doubled the number of applications available to users.
  • News Feed: How Facebook's Business Trended During 2014
    Dec. 31, 2014 FB 2 Comments

    Summary

    • FB’s stock now trades at more than 50% premium to its 52-week low of around $52.
    • Facebook’s investments on other platforms such as Messenger, Instagram, WhatsApp, Search and Oculus, could add significantly to the revenue stream starting 2015.
    • We are in the process of revisiting our $64 price estimate for Facebook’s stock.
  • Nvidia's Performance In 2014: Factors That Are Driving Growth
    Dec. 30, 2014 NVDA 2 Comments

    Summary

    • We briefly discuss the key developments in calendar year 2014 and primary factors that are driving Nvidia’s performance.
    • The company witnessed a marginal decline in its top line last year as strength in its high-end products was partially offset by a decline in the desktop PC and notebook markets.
    • Our price estimate of $20 for Nvidia is slightly below the current market price.
  • Why Growing Content Costs Are A Necessary Evil For Netflix
    Dec. 29, 2014 NFLX 1 Comment

    Summary

    • Netflix plans to broadcast more than 30 original series in 2015 and 2016.
    • Netflix has also been shelling out some serious cash to acquire the rights to various popular TV series shown on other channels.
    • Increasing content costs are putting pressure on Netflix’s margins, but this spending holds merit and is vital to Netflix’s success in the coming years.
    • Our price estimate for Netflix stands at $299, implying a discount of about 12% to the market.
  • DirecTV Launches Over-The-Top Streaming Service For U.S. Hispanic Consumers
    Dec. 26, 2014 DTV Comment!

    Summary

    • DirecTV launches over-the-top video service aimed at U.S. Hispanic consumers.
    • New service will boost DirecTV's revenues.
    • However, given that the service is targeted for a niche market, Yaveo will have a little impact on DirecTV’s stock.
  • Roche's Double Drug Failure Is Meaningful
    Dec. 26, 2014 RHHBY 3 Comments
  • F5 Retains Its Leadership By Gaining Additional Market Share In ADCs
    Dec. 25, 2014 FFIV Comment!

    Summary

    • F5 derives a significant portion of its revenue from the ADC market, and has been the leader in ADCs for many years.
    • After double-digit growth in 2012, the ADC market growth rate declined to 4% in 2013, and grew by just 1% sequentially in Q3 2014.
    • An upgraded product portfolio, a strong balance sheet, and a focus on expanding its footprint in key growth segments will enable F5 to retain its leadership in the ADC market.
    • Our price estimate of $124 for F5 Networks is just slightly below the current market price.
  • How Did Twitter Trend During 2014?
    Dec. 23, 2014 TWTR 5 Comments

    Summary

    • While Twitter posted excellent financial results during 2014, we think "huge expectations" caused its stock price to decline by over 40% during the year.
    • Factors such as a slowdown in sequential growth of monthly active users (MAUs) and a decrease in engagement levels pulled down market sentiment.
    • We advise investors to view Twitter's business more independently from its rival Facebook.
  • What Drove SanDisk's Rally In 2014?
    Dec. 23, 2014 SNDK 2 Comments

    Summary

    • SanDisk had a good year on the back of a robust performance from its solid state drive (SSD) storage division.
    • According to our estimates, the removable storage division is SanDisk’s second most valuable segment, contributing about 18% of its total value.
    • We have a $93 price estimate for SanDisk’s stock, which is slightly lower than the current market price.
  • BlackBerry Posts Surprise Profit, Weak Revenues Remain A Concern
    Dec. 22, 2014 BBRY 19 Comments

    Summary

    • BlackBerry posted a surprise quarterly profit on the back of better cost management, although its top line missed consensus by a wide margin due to disappointing handset sales.
    • Over the last year, the company has made progress in restructuring its business by lowering headcount and reining in costs, while also reworking its hardware and software strategy.
    • BlackBerry still remains a company in transition.
  • Oracle Earnings Review: Cloud's Success Helps Beat All Expectations
    Dec. 18, 2014 ORCL Comment!

    Summary

    • Oracle reported revenues of $9.6 billion and EPS of $0.69, exceeding consensus revenue estimates of $9.52 billion and the EPS estimate of $0.68 by one cent.
    • The highlight of the quarter was the cloud business, revenues from which grew by 47% year-over-year on the back of new bookings from previous quarters.
    • The company guided total revenue growth in the third quarter to grow between 4% - 8% year to year.
  • Pfizer's Acquisition Strategy: Will Pfizer Still Go For A Big Acquisition?
    Dec. 17, 2014 PFE 7 Comments

    Summary

    • We believe that Pfizer, which is still the largest pharmaceutical firm in the U.S., is at the cusp of making a major strategic decision.
    • Its recently failed bid to acquire AstraZeneca to revive the growth and reduce the costs does beg the question: will the pharmaceutical giant attempt another big acquisition or will smaller acquisitions and collaborations suffice?
    • We believe that Pfizer could raise enough debt and structure rest of the deal in stock if the prospect of a big acquisition were to emerge.
  • Nokia Expands HERE Maps Client Base With Baidu Partnership
    Dec. 16, 2014 NOK 14 Comments

    Summary

    • Baidu becomes the first Chinese company to offer international location services to Chinese tourists traveling abroad.
    • Its decision to partner with Nokia is as strategic as it is a validation of HERE's mapping expertise.
    • HERE is an apt choice for the Chinese company, with its maps in more than 200 countries and voice-navigation facility in 118 nations.
  • Adobe Earnings: Creative Cloud And Cloud Services Deliver Another Quarter Of Growth
    Dec. 16, 2014 ADBE Comment!

    Summary

    • Adobe posted its Q4 results.
    • The market reacted positively to the results, driving the stock up nearly 10%.
    • During the earnings announcement, the company said that it has entered into a definitive agreement to acquire privately held Fotolia, a leading marketplace for stock content.
  • The Key Drivers And Barriers For eBay's Business
    Dec. 15, 2014 EBAY 9 Comments

    Summary

    • We believe the rapidly growing payments business represents one the leading drivers for eBay's business.
    • The marketplaces segment will gain significantly from the secular shift toward e-commerce being seen in the retail market.
    • eBay has several competitive advantages which include a strong network effect and brand recognition, and this will magnify demand in the marketplaces segment.
  • Amazon's Profitability Can Further Decline In The Future (Part 2)
    Dec. 12, 2014 AMZN 13 Comments

    Summary

    • In this article, we assess whether the company's profitability situation could improve in the coming years and to what extent.
    • We first try to understand Amazon's ability to raise prices in its retail segment to improve margins.
    • Finally, we conduct a scenario analysis to model the CAGR in each operating expense line item to assess whether operating margin could increase or decrease going forward.
  • iPad Could Benefit From New Apple-IBM Enterprise Apps
    Dec. 12, 2014 AAPL 24 Comments

    Summary

    • New MobileFirst apps and the broader IBM partnership could help Apple ship more iOS devices to businesses.
    • The new enterprise-focused tools could provide some upside for iPad sales.
    • Our $120 price estimate for Apple is slightly ahead of the current market price.
  • Here's Why Amazon's Profitability Is So Low
    Dec. 11, 2014 AMZN 14 Comments

    Summary

    • The low pricing strategy adopted by Amazon in both online retail as well as Amazon Web Services is one of the chief reasons for its lack of profitability.
    • Additionally, Amazon owns a majority of the inventory that it sells on its websites, which adds to fulfillment and warehousing costs.
    • Investments in data centers, fulfillment and sortation centers, technology and hardware and content initiatives have further put pressure on profitability.
  • Oracle Loses 4th Spot In Global Server Market To Cisco
    Dec. 11, 2014 CSCO, ORCL, HPQ 1 Comment

    Summary

    • Cisco recently surpassed Oracle as the number four player in the global server market with a 6% market share in the third quarter of calendar 2014.
    • Oracle’s current share in the market stands at 4%.
    • We believe that Oracle’s leadership position in this burgeoning market will comfortably offset its decline in the server market.
  • What's Driving Our $120 Price Estimate For Apple?
    Dec. 10, 2014 AAPL 28 Comments

    Summary

    • We have increased our price estimate for Apple from $110 to about $120, to account for stronger projections for iPhone ASPs and gross margins.
    • With the launch of the iPhone 6 and iPhone 6 Plus, Apple has effectively filled a void in its smartphone lineup and looks set to gain market share in the premium smartphone market.
    • Bucking the trends in the broader smartphone market, Apple’s new handsets are likely to see significantly better average selling prices (ASPs).