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  • How To Profit From The Mobile Market Without Investing In Phone Makers

    Thinking of investing in the mobile market? You could try to play the mobile market through cell phone manufacturers and decide which company-Apple Inc. (NASDAQ/AAPL), Samsung Electronics Co. Ltd., Microsoft Corporation (NASDAQ/MSFT), or the slew of other players in this sector-is the best buying opportunity.

    At this time, Apple is tops in the United States, but Samsung is the global leader, and may perhaps be a better buying opportunity because of this. On the other hand, Microsoft is the up-and-comer that could make some ground if its acquisition of the cellular assets of Nokia Corporation (NYSE/NOK) is approved-which could make this stock a good buying opportunity. (Read "Why I Like Microsoft's Proposed Acquisition of Nokia's Cell Phone Business.")

    However, my thinking is to look at some of the third-party suppliers of products and solutions to the mobile market as an alternative buying opportunity to play the growth of the mobile market.

    On this regard, a stock that I have followed for a while is small-cap Synaptics Incorporated (NASDAQ/SYNA). This is the company that supplies some of the touchscreen interface technology used on the Apple "iPhone" and Samsung "Galaxy" devices, along with the touchscreen technology used for "Windows 8."

    In fact, Synaptics has supplied its interface solutions to over one billion devices, according to the company's web site. These devices include mobile phones, notebook computers, personal computer (PC) peripherals, and portable entertainment devices.

    Synaptics is also working on a revolutionary technology that combines its touchscreen solution with the eye-tracking and gaze applications of Tobii Technology. The combination of the two technologies is currently being tested on a prototype laptop. (Source: "Tobii and Synaptics Unveil Concept Laptop That Integrates Eye Tracking and Touchpad User Interface Controls," Synaptics Incorporated web site, June 25, 2013, last accessed October 8, 2013.)

    The company has beaten the Thomson Financial consensus estimates in four straight quarters, which has driven buyers to the stock, recently pushing it to a new 52-week high.

    But despite the steady rise in the stock, Synaptics is still a possible buying opportunity with a decent valuation trading at 11.8X its estimated Thomson Financial earnings per share (NYSEARCA:EPS) of $4.03 for fiscal 2014 (ending in June). The price-to-earnings-growth (NYSE:PEG) ratio of 1.0 is also attractive for a growth stock and is based on a conservative five-year average annual earnings growth rate of 11.67%, according to Thomson Financial. Again, this suggests a possible buying opportunity.

    Read More : How to Profit from the Mobile Market Without Investing in Phone Makers

    Oct 09 9:39 AM | Link | Comment!
  • Update: Apple's Attempt To Enter Emerging Markets A Blunder?

    When the next-generation Apple Inc. (NASDAQ/AAPL) "iPhone 5S" and "iPhone 5C" were launched in mid-September, the company reported record sales over its first weekend of selling.

    But there was a problem: the majority of the sales were for the iPhone 5S, while sales of the iPhone 5C lagged. The problem was the cost of the plastic-cased 5C; at around $100.00 with a two-year contract, the "cheaper" version simply cost too much, especially for the emerging markets like China, where Apple had high hopes for the iPhone 5C.

    Obviously, the initial demand for the iPhone 5C over the first few weeks appears to be disappointing. Best Buy Co., Inc. (NYSE/BBY) announced it was cutting the price of the 5C to $50.00 on a two-year contract between October 3 and October 7.

    But while the discount was only for four days, you kind of wonder if there will be a more permanent price cut ordered by Apple should sales lag.

    The iPhone 5S is selling very well, but for Apple to really break out of its shell, the company will need to cut the cost of the iPhone 5C in order to get a foothold in the emerging markets.

    Without a major price cut, it will not be easy for Apple to break into a mobile market that focuses on attractively priced smartphones-a market that includes established rivals, such as Nokia Corporation (NYSE/NOK), whose mobile assets are to be acquired by Microsoft Corporation (NASDAQ/MSFT), Samsung Electronics Company Ltd., LG Corporation, and major upstarts, such as Huawei Technologies Co. Ltd. and ZTE Corporation, based out of China.

    For Apple, the massive mobile market in China is what the company desperately aims to grow. The company's current market share in China is insignificant and lags behind both the domestic and foreign makers.

    So far, an official distribution deal with China Mobile Limited (NYSE/CHL), the largest cell phone operator in China with 500 million-plus users, has yet to materialize and this is worrisome. Apple needs China, especially a deal with China Mobile.

    Until Apple can make some ground in China and other massive cell phone sectors in the emerging markets, such as India, Asia, and Latin America, the company will only be regarded as tops domestically. With the U.S. mobile market being only a small fraction of the global market, Apple will need international success.

    In my view, I would be hesitant to buy Apple now unless there are developments in China. One contrarian play in the smartphone market to consider might be Microsoft, if its deal to buy the mobile assets of Nokia is approved. (Read "Why I Like Microsoft's Proposed Acquisition of Nokia's Cell Phone Business.")

    Oct 08 9:42 AM | Link | Comment!
  • 2013 Stock Market An Exact Repeat Of 1954?

    Wow!

    In the first nine months of this year, the S&P 500 has run up 18%-that's about two percent per month. Other key stock indices have provided similar returns. At this pace, by the end of 2013, the S&P 500 will be up 24% for the year.

    As my doubts about the performance of key stock indices continue to mount, some in the mainstream are saying the market will only go higher.

    A story that ran in Bloomberg on Monday said the movement we see in the S&P 500 now is an almost exact duplicate of what we saw in 1954-a year in which the S&P 500 rose 45%. The research found that the S&P 500 is moving pretty much the same on a day-to-day basis as it did in 1954. The correlation coefficient (a statistical measure that looks at the movement in two variables) is 0.95. The maximum you can have is 1. (Source: Bloomberg, September 30, 2013.)

    In 1954, the S&P 500 reached the highest level since the Great Depression.

    Read More :- 2013 Stock Market an Exact Repeat of 1954?

    Oct 04 8:14 AM | Link | Comment!
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