Tue, Mar. 24, 3:54 PM
- Buyback-happy U.S. firms are prohibited from repurchasing shares from about five weeks prior to releasing quarterly earnings to about 48 hours after those reports. These blackout periods, says Goldman, may offer an especially tasty time for investors to pick up shares of their favorites.
- "High valuations in the absence of corporate demand may weigh on stock prices," says Goldman's Amanda Sneider, and particular areas of focus are tech, consumer discretionary, and financials - they've accounted for more than 50% of buyback activity.
- Goldman's buyback blackout theme buys: SanDisk (NASDAQ:SNDK), Yahoo (NASDAQ:YHOO), Travelers (NYSE:TRV), Apple (NASDAQ:AAPL), Juniper Networks (NYSE:JNPR), Xerox (NYSE:XRX), Torchmark (NYSE:TMK), F5 Networks (NASDAQ:FFIV), Citrix Systems (NASDAQ:CTXS), Aon (NYSE:AON), Moody's (NYSE:MCO), VeriSign (NASDAQ:VRSN), Hartford Financial (NYSE:HIG), Ameriprise (NYSE:AMP), Corning (NYSE:GLW), Time Warner (NYSE:TWX), Seagate Technology (NASDAQ:STX), Viacom (NASDAQ:VIAB), Legg Mason (NYSE:LM), XL Group (NYSE:XL), DirecTV (NASDAQ:DTV), Allstate (NYSE:ALL), Nvidia (NASDAQ:NVDA), CBS (NYSE:CBS), Macy's (NYSE:M), Kohl's (NYSE:KSS).
Fri, Feb. 6, 12:54 PM
- Verisign (NASDAQ:VRSN) guided on its Q4 CC (transcript) for 2015 revenue of $1.04B-$1.06B (3%-5% growth), slightly unfavorable to a $1.06B consensus. However, that's better than feared given concerns about weakening .com domain name registration revenue.
- Meanwhile, the company expects 2015 op. margin to be in a 60%-62% range vs. 60.2% in 2014, and gross margin to be at least 80%. Domain name revenue is expected to rise 2%-3.5%.
- Also: Verisign has added $453M to its buyback authorization, bringing its total size back up to $1B. $209M was spent on buybacks in Q4, and $867M over the whole of 2014.
- Verisign saw only 590K net new domain name adds in Q4 (gross registrations totaled 8.2M), below guidance of 700K-1.2M and contributing to the Q4 miss. However, net adds are expected to rise to 1M-1.5M in Q1. The renewal rate (though fluctuating a bit) remains around 72%.
- 2014 free cash flow was $568M, well above net income of $383M.The deferred revenue balance rose 3% during the year to $890M.
- Q4 results, PR, earnings slides (.pdf)
Thu, Feb. 5, 4:20 PM
Mon, Jan. 26, 11:40 AM
- Four days after JPMorgan downgraded Verisign (NASDAQ:VRSN), Credit Suisse has cut the site authentication/doman name service provider to Underperform. Its target is $47.50.
- Like JPMorgan, CS sites the potential for slowing domain name revenue growth. It's also critical of Verisign's relative valuation. Q4 results arrive on Feb. 5.
Thu, Jan. 22, 11:25 AM
- Arguing new top-level domains are cannibalizing the company's .com registration revenue, JPMorgan has downgraded Verisign (VRSN -1.5%) to Underweight ahead of its Feb. 5 Q4 report. The firm's target remains at $57.50.
- Shares have largely tread water since Verisign's Oct. 23 Q3 beat. They trade for 18x 2015E EPS.
Oct. 23, 2014, 4:19 PM
Sep. 6, 2014, 8:43 AM
- The "total" yield of a company combines the dividend yield and the buyback yield - that is the yield boost from reducing the total amount of shares outstanding. Together with S&P's Howard Silverblatt, Barron's puts together a list of the top 20 companies in the S&P 500 based on "total" yield.
- While buybacks don't guarantee a strong stock - witness consistent buyback champs like IBM and Kohl's (NYSE:KSS) - Warren Buffett goes to bed at night praying for IBM's share price to go down so the company can buy back more stock for a given dollar amount (though The Oracle has said he doesn't expect this logic to win many fans).
- The flip-side are those companies - financials and energy come to mind - who tend to buy back stock at high prices only to find themselves forced to reissue it at lower prices when times get tough. A consistent plan helps, and Travelers (NYSE:TRV), under CEO Jay Fishman, has been maybe the best example of this - halving the share count since the end of 2006.
- ETFs? The Powershares Buyback Achievers Portfolio (NYSEARCA:PKW) gained 45.6% in 2013, 1,300 basis points better than the S&P 500. Since inception in 2006, it's up an annualized 9%, more than 200 basis points better than the S&P. A newcomer - the Cambria Shareholder Yield ETF (NYSEARCA:SYLD) - has beaten the S&P by about 250 basis points since its May 2013 inception.
- The list (ranked in order of "total" yield): ADT, CAM, CF, MOS, MPC, VIAB, GLW, ITW, STX, IBM, NOC, CTL, TRV, VRSN, IR, CCE, KSS, NTAP, HES, DO.
Jul. 25, 2014, 12:45 PM
Jul. 25, 2014, 11:30 AM
- Though Verisign (NASDAQ:VRSN) missed Q2 revenue estimates (while beating on EPS), it guided on its CC (transcript) for full-year revenue of $1.003B-$1.012B, in-line with a $1.01B consensus. In addition, full-year op. margin guidance was hiked by 100 bps to 59%-61%.
- $300M was spent on buybacks in Q2, fueling the EPS beat. Verisign is adding $491M to its buyback authorization, raising its size to $1B. The company has $1.5B in cash to finance buybacks with.
- Q2 domain name net adds totaled 420K, towards the low end of a 300K-800K guidance range. But Verisign expects net adds to grow to 600K-1.1M in Q3.
- Total active .com/.net domain names amounted to 128.9M at the end of Q2, +3.7% Y/Y. However, processed domain names slipped by 200K Y/Y to 8.5M, and the company discloses renewal rate fell 60 bps in Q1 to 72.6%. The deferred revenue balance is up $35M YTD to $890M.
- Q2 results, PR
Jul. 24, 2014, 4:13 PM
Jun. 27, 2014, 11:06 AM| Comment!
Jun. 24, 2014, 9:53 AM
- Web.com (WWWW) and Endurance International (EIGI) are plummeting following Google's launch of a domain name registration service aimed at small businesses.
- Meanwhile, Google launch partner Wix.com (WIX) is going in the opposite direction. The company announced this morning its registered user base has topped 50M, and that 3M+ mobile sites have been built on its platform.
- B. Riley has cut Web.com to Neutral. Its PT is still at $40.
- Verisign (VRSN +0.7%), which runs the domain name registries for .com, .net, and other major suffixes, is up moderately.
Apr. 24, 2014, 4:20 PM
Apr. 9, 2014, 6:55 PM
- While much of the attention in recent weeks has been on high-flying momentum stocks falling back to earth, there’s also been a big rally among many of the stocks with largest short positions.
- Rallies in heavily shorted stocks are being driven by hedge funds pulling back on all their stock positions, so as bullish positions in high-growth stocks have been ditched, short positions have been closed out as well.
- Among the top 10 most shorted stocks, seven have rallied over the last month - with four up by double-digit percentages - even as the S&P 500 has dropped 0.8%: GameStop (GME, +11.5%), US Steel (X, +13.9%), Joy Global (JOY, +7.2%), ADT (ADT, -0.9%), VeriSign (VRSN, -8.6%), Essex Property Trust (ESS, +0.6%), Quest Diagnostics (DGX, +13.1%), Microchip Technology (MCHP, +2.8%), Western Union (WU, -1.9%), Frontier Communications (FTR, +13.6%).
Apr. 9, 2014, 2:02 PM
- The NYT reports leading domain name registrar Go Daddy (best known for its colorful Super Bowl ads) has hired JPMorgan and Morgan Stanley to handle an IPO that could occur later in 2014.
- Go Daddy was acquired by P-E firms KKR and Silver Lake, and VC firm TCV, for $2.25B in 2011. In addition to domain name registrations, the company offers Web hosting, site design, and SSL certificate services. Rivals include VeriSign (VRSN) and WIX.
- The company hired former Yahoo product chief Blake Irving to be its CEO in 2012, and has been trying to develop a more corporate-friendly image.
Mar. 17, 2014, 9:43 AM
- VMware (VMW +2.2%) has been started at Buy by Monness Crespi.
- SAP (SAP +2.2%) has been upgraded to Buy by Citi.
- VeriSign (VRSN -8.8%) has been cut to Market Perform by Cowen. The downgrade comes as the NTIA announces it will relinquish control of the Internet's domain name management system to an international body. VeriSign insists the move won't affect its operation of the .com and .net registries.
- CommVault (CVLT +3.3%) has been upgraded to Buy by Mizuho.
- RingCentral (RNG +4.5%) has been started at Outperform by William Blair.
- NetScout (NTCT +0.1%) has been cut to Neutral by D.A. Davidson.
- RPX (RPXC +3%) has been started at Outperform by Cowen.
- Cadence (CDNS +1.4%) has been started at Overweight by Piper.
VRSN vs. ETF Alternatives
VeriSign Incis a provider of domain name registry services and internet security, enabling internet navigation for many of the world's recognized domain names and providing protection for websites and enterprises around the world.
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