Tag Archives: AMZN

Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

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Divide grows on asset purchases. Fed officials are increasingly divided over the efficacy and appropriate duration of monthly asset purchases, speeches delivered this week indicate. Complicating matters is economic data which at times seems to convey conflicting messages regarding the health of the nascent recovery. For instance, while the employment landscape may be improving, some of that improvement may be attributable to discouraged workers exiting the labor force. This week, the heads of the Philadelphia, Dallas, and Richmond Federal Reserve Banks all suggested bond buying should be tapered immediately while Boston’s Eric Rosengren maintained his stance in favor of the purchases. Of particular note is San Francisco Fed Chief John Williams, who said the Fed could reduce the pace of asset purchases “perhaps as early as this summer,” assuming conditions remain stable.

J.C. Penney misses, looks forward. "One of our top priorities this year is to


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Now That Apple Has Bottomed, What Is It Worth?

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By Chad Brand:

Rational thought is beginning to take shape again as investors try to pin down a fair value for shares of Apple (AAPL) stock. A price below $400 just weeks ago made little sense for a company with $150 per share in net cash and $40 per share of net earnings (P/E ratio ~ 6x). With the stock back above $450 as the newly announced (and massive) share repurchase program commences, where is Apple likely to trade? This is not an easy question to answer, as the bears think it should trade at a multiple more in line with Microsoft (MSFT), while the bulls could argue that Google (GOOG) is a better comparable. Since Google trades at double the valuation of Microsoft (I am using trailing 12 months cash flow multiples in this article), fair value assessments can vary greatly based on your assumptions.

To put this debate


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Wall Street Breakfast: Must-Know News

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Wall Street Breakfast Editors submit:

Top Stories
Bain, Golden Gate close in on $6.5B BMC deal. Private-equity firms Bain and Golden Gate could reportedly announce a deal today to acquire BMC Software (BMC) for over $6.5B, with the $46-share-offer above the latter’s close of $45.42 on Friday. The proposed deal would follow pressure from activist investor Paul Singer for BMC to sell itself. Singer, who holds 9.7% in BMC, has criticized the company for failing to realize the opportunity in Internet-based business software.

P-E firms mull $8B Neiman Marcus exit. Neiman Marcus owners TPG Capital and Warburg Pincus are reportedly considering a sale or an IPO of the luxury retailer, with the private-equity firms believing that they can pull in $8B for the department-store chain after buying it for $5.1B in 2005. If a deal is struck, the valuation could be of interest to investors of mall rivals Saks (SKS) and Nordstrom (JWN).


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Corporations Boost Dividends 3.3 Times Since 1998

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By Vin Colby:

In 2000, Wal-Mart (WMT) generated $8.2 billion in cash from operations, $6.2 billion (75%) of which went into capital expenditures, like investing in new stores. A far smaller share — about $1 billion — was returned to shareholders in the form of dividends and share buybacks. Investing in the future far outweighed rewarding investors today.

In 2012, the tables flipped. Wal-Mart generated $25.6 billion in cash from operations and spent $12.9 billion — or 50% — on capital expenditures. Another $13 billion was distributed to shareholders in dividends and buybacks. Investing in the future and rewarding shareholders today took equal precedence.

Part of this shift is Wal-Mart maturing from a growth company into a stalwart. But it’s actually indicative of how most of corporate America has changed over the last decade. Goldman Sachs recently published a report showing how S&P 500 (SPY) companies have spent their cash


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This Dividend King Has Paid Dividends For 97 Years Nonstop

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ByMartin Vlcek:

3M (MMM) is a well-diversified industrial conglomerate. It is one of the oldest and longest publicly traded companies in the US. A member of the Dow Jones Industrial Average index, with the market cap of $73B and annual sales of $30B.

If any company meets the longevity criteria of Warren Buffett and other long-term investors of a long history of regularly paid out and constantly increasing dividends, it is definitely 3M. It has been continuously paying a dividend since 1916 every single quarter. In the last 55 years, the dividend has also been increasing every single year. The average annual dividend growth rate was 7.5% over the last 40 years. The current dividend yield is 2.4%. Just to put this into a long-term perspective, Google (GOOG) didn’t have its IPO ten years ago yet. Facebook (FB) didn’t even exist ten years ago.

However, every company has its weak points and


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Microsoft’s Surface Pro: It’s A Hit

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By Ashraf Eassa:

A very useful tool to gauge the success/failure of a given product is to check out the reviews of said product on a popular site such as Amazon.com (AMZN). After my recent piece regarding Microsoft’s (MSFT) Windows 8, I became interested in how well the software giant’s own attempt at a high end tablet/Ultrabook was working out. Does the public like the Surface Pro, or is it the flop that many seem to think it is?

Amazon Reviews Are Almost Uniformly Positive

Judging from the review ratings on Amazon, on a 1-5 scale, it seems that the device is getting universally praised, with both the 64GB as well as the 128GB models receiving an average rating of 4.5 stars out of 5 — pretty impressive!

(click to enlarge)

In addition to similar rankings for both models, it seems that from the number of reviews submitted for each device,


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Amazon Falling From Tax Haven To Debt Hell – Prepare To Sell

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ByMartin Vlcek:

Amazon has been a smashing success story for many years now. I immensely admire Jeff Bezos. I am confident to say that he is currently one of the best CEOs in the US. I was initially going to write an article praising Amazon and explaining why I think that, despite the headwinds, fierce competition and its hefty stock valuation, Amazon’s business model of customer focus and sales loss-leadership as a marketing expense to gain new customers and maximize average customer value, is very sound and can keep generating market share gains.

However, after doing deeper research and building a SWOT analysis of Amazon (AMZN), I simply don’t see how even such an exceptional leader and marketer as Jeff Bezos is, can keep bending the reality for much longer than beyond the end of 2013. The sales growth is likely to slow. This fact will cause investors to reevaluate their view


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Is Google Making A Critical Mistake?

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By Intelligent Speculator:

I’ve generally been very bullish about Google (GOOG), especially if you’re investing with a 5-10 year horizon. One of the big reasons for that is the upside involved in some of its projects such as self-driving cars, Google glasses, the potential of the Android O/S dominance, etc. In general, I like the fact that Google is willing to try out so many different things. It has also been good about shutting down failing projects (even though that carries risks as well). Sometimes though, Google like many others tries to stretch things too far.

The Temptation For Ecosystems

I’ve discussed the critical aspect of owning ecosystems in the past and can certainly see how companies like Google, Apple (AAPL), Amazon (AMZN) and Facebook (FB) believe that they can (successfully) launch almost any product because of their dominant ecosystem. To some degree, they are right. For example, while I did initially


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