Friday, December 19, 2014
- Consumer spending in several areas is likely to benefit from lower pump prices, but J.P. Morgan's Ryan Brinkman thinks the auto industry may benefit more than most from consumers having more money to spend on all things apart from fuel.
- The analyst sees Goodyear Tire (NASDAQ:GT), American Axle (NYSE:AXL), GM and Ford (NYSE:F) - in that order - as best positioned to benefit, followed by suppliers with material exposure to full-size trucks and SUVs that is not as great as AXL, including Tenneco (NYSE:TEN), Lear (NYSE:LEA) and Tower International (NYSE:TOWR).
- Tesla (NASDAQ:TSLA) is an exception, however, as Brinkman sees a potential reduction in the terminal value of cash flows on his reduced outlook for Model 3 vehicles if fuel prices remain low longer-term.
- News Corp. (NASDAQ:NWS) has bought BigDecisions.com, a site that "aims to help Indian consumers make smarter financial decisions through interactive, decision-making tools powered by sophisticated algorithms and data." Terms are undisclosed.
- With News Corp. stating BigDecisions.com has "helped some 40,000 users," the site appears to have a fairly small base as of now. Last month, News Corp. spent $30M to take a 25% stake in Indian real estate site PropTiger.com.
- Staples (NASDAQ:SPLS) states its recent data breach (first disclosed in October) involved the deployment of malware to "some point-of-sale systems at 115 of its more than 1,400 U.S. retail stores." Action was taken in mid-September to remove the malware.
- The company thinks the malware "may have allowed access to some transaction data at affected stores, including cardholder names, payment card numbers, expiration dates, and card verification codes." It thinks 1.16M payment cards "may have been affected." A list (.pdf) of affected stores and dates has been provided.
- SPLS -0.5% AH. Staples, of course, is far from the only company to report a high-profile breach over the last 12 months.
- Tesla Motors (NASDAQ:TSLA) is out with more details on the new battery swap pilot program set to launch.
- Select Model S owners will be give the chance to test the service at a new facility in Harris Ranch, California
- The EV automaker says the battery switch will take three minutes.
- If Tesla determines that there is sufficient demand, it will invest in automation and design upgrades to cut down the swap process to under a minute.
- American Apparel (NYSEMKT:APP) trades higher after news broke last night on the company receiving buyout offers.
- A breakdown of the development by ValueWalk concludes the company is taking the offer seriously based on the observation that a $15M unsecured credit agreement hasn't been signed off on yet - despite being tipped off in November.
- Shares of APP are up 9% to $1.09, still well-below the $1.30-$1.40 offer price reported to be offered by a Dov Charney-friendly P-E firm.
- U.S. automobile sales are forecast to increase 11% in December to an annual selling rate of 16.6M units, according to a fresh forecast from TrueCar.
- The research firm says the industry benefited from lower gas prices and a better month of weather than was seen a year ago.
- For the full year, TrueCar expects total U.S. vehicle revenue to be up 8.3% to close to $1T.
- Transaction prices on new cars are up 1.9% to $31,831 YTD.
- Used vehicle sales are up 3.3% for the year.
- Related stocks: GM, F, TM, FCAU, HMC, OTCPK:NSANY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY, OTCQX:VLKAY, OTCPK:FUJHY, KMX, CRMT, AN, LAD.
- The age of connected cars appears closer with Google pushing forward with its next-gen Android M software designed to be integrated into automobiles.
- The industry has a bit of an uneasy relationship with Google, despite the company's open-source approach to the technology.
- Though most major automakers collaborate with Google through the Open Automotive Alliance - which aims for a common platform to drive innovation - the self-driving car initiative of Google and their own infotainment ambitions keep them wary.
- Analysts originally forecast vehicle-to-vehicle communication would be part of the connected car concept and be integrated into some models by 2016, although that timetable now appears unlikely.
- What to watch: Before any major breakthrough occurs, the DOT needs to weigh in on next-gen connected cars. That gets trickier with safety and security concerns teed up again after the high-profile GM recall debacle and crippling Sony hacking incident.
- Automaker stocks: GM, F, TM, HMC, OTCPK:NSANY, TSLA, OTCQX:VLKAY, OTCPK:DDAIF, OTC:HYMLF, OTCPK:BAMXY, OTCPK:MMTOF, OTCPK:PEUGF, OTC:RNSDF, TTM, OTCPK:MMTOF, OTCPK:SZKMY, OTCPK:FUJHY, OTC:RNSDF, OTCPK:GELYF, FCAU.
- Analysts expect a mixed holiday season for the retail sector in Hong Kong.
- While mass market retail is forecast to hold up with the level of demonstrations in the region moderating, there's some concerns on the luxury sector.
- The corruption crackdown by Beijing and the weak Yen are two potential drags on tourist traffic.
- Consumer confidence on the high end has also been weakening.
- What to watch: The critical Chinese New Year begins in February giving the luxury sector scant time for the environment to improve.
- Luxury sellers in HK: Gucci (OTC:GUCG), Prada, Louis Vuitton (OTCPK:LVMUY), Coach (NYSE:COH), Ralph Lauren (NYSE:RL), Michael Kors (NYSE:KORS), Swatch (OTCPK:SWGAY), Burberry (OTCPK:BURBY), and Tiffany (NYSE:TIF).
- Whole Foods Market (WFM -0.2%) sits in an ideal position to acquire smaller health and wellness chains, according to Sterne Agee.
- The company's FQ4 balance sheet showed it was light on long-term debt.
- Analyst Charles Grom identifies Fairway Markets (FWM +0.7%) and privately-held Earth Fare as potential targets for Whole Foods.
- DirecTV (DTV +0.1%) says subscribers will have access to the TV Everywhere offerings from Fox Networks (NASDAQ:FOXA).
- Beginning in January, DirecTV Everywhere will also include VOD content from Fox.
- DirecTV's strategy to offer streaming services from within the TV Everywhere platform differs from satellite rival Dish Network which is going with an OTT product.
- FDA Deputy Commissioner for Foods and Veterinary Medicine Michael R. Taylor sends Herbalife (HLF +1.1%) CEO Michael O. Johnson a letter requesting the company remove a broadcast advertisement on YouTube that mischaracterizes the regulator's role pertaining to dietary supplements. In the video, former FDA director Vasilios H. Frankos, Ph.D., states that during his time at the agency he made sure that nutritional supplements were safe and effective for use. This is surprising since the FDA does not regulate dietary supplements.
- The FDA's request is far from urgent. The video was published on April 12, 2011.
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11:11 AM| 1 Comment
- Wal-Mart de Mexico (NYSE:WMT) taps Enrique Ostale to be its new CEO.
- Ostale served previously at the parent company as the top Walmex and Latin America exec.
- He will take over the new role on January 1.
- Wal-Mart de Mexico reported sales growth of 4.3% in Q3, while EBITDA fell 4.2% during the period.
- The DOJ and FBI will announce today the North Korean government was responsible for the Sony (SNE -2.8%) hack that (among many other things) led The Interview's release to be cancelled. An announcement is expected by 1:30PM ET.
- Reuters reports hearing from an official that "there may be a Chinese link either through collaboration with Chinese actors or by using Chinese servers to mask the origination of the hack."
- Threat-prevention hardware/software/services provider FireEye (FEYE +4.9%), hired to probe the hack and help restore Sony's systems, is adding to yesterday's gains.
10:53 AM| 1 Comment
- Chinese President Xi Jinping visits Macau this weekend in a trip aimed at promoting new industries in the former Portuguese colony.
- Yesterday, Macau inked a service trade agreement with China which could open the door for new non-casino development.
- The financing of VIP junkets continues to be a major topic in the region.
- What to watch: Casino license discussions begin next year with concessions due to start expiring in 2020. It's expected that most operators will placate Beijing and offer to diversify their operations to a degree. Macau-related stocks: MPEL, MGM, WYNN, LVS, OTCPK:GXYEF, OTCPK:SJMHF.