Archive for February, 2012
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Morning News: February 10, 2012
Eddy Elfenbein, February 10th, 2012 at 5:36 amGreece Rebuffed on Aid Over Austerity Vote
Draghi Slams ‘Virility Statements’ as Ackermann Shuns ECB Loans
In Europe, Stagnation as a Way of Life
China’s First Trade Contraction in Two Years Adds Growth Concern: Economy
U.S. Postal Service Loses $3.3 Billion
Mortgage Plan Gives Billions to Homeowners, but With Exceptions
S.E.C. Reaches Settlement in Bear Stearns Fraud Case
Technology Services Boost NYSE Euronext Profit
Alibaba.com May Become Part of Deal With Yahoo
Oracle Acquires Taleo for $1.9 Billion to Add Human-Resources Cloud Tools
LinkedIn Forecasts Top Analysts’ Estimates as Ad Sales Surge; Shares Climb
French Oil Giant Total SA’s Profit Rises on High Oil Prices
Alcatel Sees Higher Margins After Ending Losses
Barclays Caps Bonuses as Profit Falls
Epicurean Dealmaker: The Harrowing
Edward Harrison: Video: Quantitative Easing Revisited
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The Big Chill
Eddy Elfenbein, February 9th, 2012 at 5:03 pmCheck out this chart of the S&P 500. It’s is a high-low-close chart. Instead of focusing on the direction of the market, take note of the daily range — the spread between each day’s high and low.
In particular, notice how much the daily range has narrowed over the last six months. This, my friends, is the big story. Investors have chilled out in a major way.
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Oracle Snaps Up Taleo for $1.9 Billion
Eddy Elfenbein, February 9th, 2012 at 12:41 pmIn December, Oracle ($ORCL) bought RightNow. Apparently, they’re still in a buying mode. The company just bought Taleo ($TLEO) for $1.9 billion. TLEO shareholders will get $46 per share which is an 18% premium to yesterday’s close.
Oracle is using acquisitions to build its cloud business as part of efforts to help blunt the impact of a possible slowdown in software sales growth. Cloud services are meant to appeal to customers seeking to save money by letting them access computing power over the Web. Taleo is another fit-in with that strategy, following the $1.5 billion purchase of RightNow Technologies Inc. (RNOW) last year, said Mark Moerdler, an analyst at Sanford C. Bernstein & Co. in New York.
“Taleo is the next-largest player in the talent-management space,” said Moerdler, who rates Oracle “market perform.”
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Blast from the Past: Credit Suisse Analyst Raises Price Target on Google to $900
Eddy Elfenbein, February 9th, 2012 at 12:02 pmCredit Suisse Internet analyst Heath Terry this morning raised his price target for Google (GOOG) to $900, from $800, in what he describes as an “attempt to better account for long-term opportunities in areas like display, local and mobile.”
Terry contends that “as all advertising goes digital, including television, radio and outdoor, and Google becomes the de facto operating system for advertisers, providing them with the dashboard to monitor and optimize their advertising, tremendous value will be created for Google shareholders.”
He sees the advertising opportunity driving top line growth of 35% or more, and profit growth of at least 30%, over the next five years.
Terry upped his 2008 EPS estimate to $18.93 from $18.75.
He also says that the company eventually will get “effectively” 100% of the Internet search market. He expects ongoing share gains to provide 38% growth in its search business over the next five years.
Google today is up $25.60, or 4%, to $651.45.
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Visa Soars to $112
Eddy Elfenbein, February 9th, 2012 at 11:11 amVisa ($V) has been on my Watch List for sometime. It’s a great company and I wish I had added to my Buy List a long time ago.
This is one of the those stocks that you watch go up and up and then beat yourself up for not getting in earlier. The stock is up again today on strong results:
Visa Inc. (V) posted a 16.4% increase in fiscal first-quarter profit as the credit-card processor continued to benefit from consumers’ increased use of plastic while grappling with new federal rules that affect debit-card purchases.
The San Francisco-based company said Wednesday cardholders ratcheted up their use of Visa’s credit and debit cards, driving up the volume of transactions it processed 8% to 13.6 billion.
“Consumers’ desire to use our products is evident in the strong growth we see outside the U.S. and the resiliency we are seeing in the U.S. in the wake of debit regulation,” Joe Saunders, chairman and chief executive of Visa, said in a statement.
Visa posted net income of $1.03 billion, or $1.49 per share, up from $884 million, or $1.23 per share, a year ago. Revenue rose 13.8% to $2.55 billion.
Visa’s results beat the estimates of analysts, who were expecting the company to earn $1.45 per share on revenue of $2.43 billion, according to Thomson Reuters.
The company said its board of directors authorized a new $500 million repurchase program for Class A shares.
The stock is currently at $112. Wall Street expects them to earn $5.87 per share for this fiscal year (ending in September) and $6.80 for next year. Unfortunately, it’s starting to look pricey now.
If anyone needs me, I’ll be beating myself up some more.
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Changes at the Top in Ford
Eddy Elfenbein, February 9th, 2012 at 10:40 amI’ve been pleased with Ford‘s ($F) performance this year. I continue to believe this is an underpriced stock.
Today, two key members of the company’s management team announced their retirements. The CFO, Lewis Booth, and global product chief, Derrick M. Kuzak, will leave their positions on April 1st. The best news for investors is that Alan Mulally said he has no plans to leave anytime soon. Mulally has been critical to Ford’s turnaround.
Last month, Ford had a fairly mediocre earnings report. I expect that the next earnings report in late April will be much better. Ford’s stock is currently up 18% on the year for us.
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Jobless Claims Continue to Fall
Eddy Elfenbein, February 9th, 2012 at 10:30 amJobless claims fell again last week, this time by 15,000. The Labor Department reported that 358,000 Americans filed for unemployment payments. Economists were expecting 370,000.
The important thing here is the trend. While the jobs market remains weak, we now have evidence that things are getting better. The problem, of course, is that things are getting better at a very slow pace.
Combined with last week’s jobs report which showed that the unemployment rate dropped to 8.3%, we can see that the economy is improving.
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Morning News: February 9, 2012
Eddy Elfenbein, February 9th, 2012 at 6:25 amGreece Talks Stall as Venizelos Heads to Brussels
China Inflation Spike Pricks Policy Easing Expectations
Chinese Policy Banks Looking to Make Yuan Loans in Latin America
Holiday Hits China Auto Sales in January
Indonesia Unexpectedly Cuts Interest Rate to Support Growth
Obama Advisers Offer Rosier Jobs Outlook
Fed Delays Vote on Capital One Deal for ING Direct
States Negotiate $26 Billion Deal for Homeowners
Goldman Wins New York Fed Auction for A.I.G. Assets
Groupon Posts Loss of $9.8 Million
Credit Suisse Posts First Loss in Three Years
Daimler Profit Rises on Record Mercedes Demand
Caesars Surges 71% in Debut After Slashing IPO From 2010 Try
ING Feels Impact of Euro Crisis
Alibaba Seeks to Buy Back Yahoo Stake
Joshua Brown: The Economy’s Improving, Have a Cupcake
Jeff Miller: Navigating Silly Season: An Investor Guide to the Political Landscape
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The Reversal Market of 2012
Eddy Elfenbein, February 8th, 2012 at 8:06 pmOne of the interesting facts of this year’s market is how much it’s the complete opposite of last year’s market. Bank of America ($BAC), for example, was one of the worst stocks to own last year and it’s been one of the best this year (+46%).
Here’s a look at how the different S&P sectors performed last year and this year so far. Notice how (except for telecom which probably shouldn’t be its own sector) the rank ordering is almost completely inverted from 2011 to 2012.