Netflix higher on potential Obama deal

Netflix rises on report Obamas may produce series of shows

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more
Netflix higher on potential Obama deal

Shares of Netflix (NFLX) are rising following a report that said the company is in “advanced negotiations” with former U.S. President Barack Obama and Michelle Obama to produce a series of shows.

POTENTIAL OBAMA DEAL

Former U.S. President Barack Obama and his wife Michelle Obama are nearing a deal with Netflix to produce a series of exclusive shows that will give them a global platform after their departure from the White House, the New York Times reported Friday.

Netflix higher on potential Obama deal. Stockwinners.com
Netflix higher on potential Obama deal.

It is not clear how much the Obamas will be paid under the proposed deal, which is not yet final, and the number of episodes and formats for the shows have not yet been decided.

Obama does not plan to use the shows to directly respond to President Trump or conservative critics but has talked about producing shows that feature inspirational stories.

The move comes as Netflix competes for viewers with Apple (AAPL) and Amazon (AMZN), which have also expressed interest in discussing content deals with Obama.

The company previously said it could spend as much as $8B on content this year. Eric Schultz, a senior adviser to the former president, commented that “President and Mrs. Obama have always believed in the power of storytelling to inspire.

Throughout their lives, they have lifted up stories of people whose efforts to make a difference are quietly changing the world for the better. As they consider their future personal plans, they continue to explore new ways to help others tell and share their stories.”

ANALYST COMMENTARY

Following the report of the talks, GBH Insights head of technology research Daniel Ives reiterated a “highly attractive” rating and reaffirmed his $375 price target on Netflix, citing optimism over the company’s original content initiatives, CNBC reported.

“We would characterize this as a ‘home run’ deal for the company as they are aggressively looking to acquire high profile talent and original content to further feed the Netflix consumer machine,” Ives said, adding Netflix is an appealing distribution platform for Obama due to its 120M subscribers.

In addition, the analyst said he believes the company remains in “a unique position of strength” to grow content and distribution over the next 12 to 18 months as well as further expand its content and streaming footprint with the potential Obama deal.

PRICE ACTION

Netflix (NFLX) shares are higher about 3%, or $9.17, to $326.17 in Friday’s trading.


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Netflix introduces PIN protection, Shares jump

Netflix introduces PIN protection, enhancements for ‘informed’ viewing

Disney loss having minimal impact on Netflix subscribers. See Stockwinners.com Market Radar to read more
Netflix introduces PIN protection, enhancements for ‘informed’ viewing

Mike Hastings, a director of enhanced content at Netflix (NFLX), said in a blog post: “At Netflix, we offer a wide variety of series and films catering to an equally broad variety of tastes and sensibilities.

With that in mind, we are improving some long-standing Netflix features that provide members with the information and tools they need to make wise decisions about what’s right for themselves and for their families.

We’re rolling out these improvements across the many devices used by Netflix members, and across our global markets, in the coming months. The first change involves introducing a PIN parental control for individual movies and series to give parents and guardians more specific control over what children can watch on the service.

We understand that every family is different and that parents have differing perspectives on what they feel is appropriate to watch at different ages.

While we already provide PIN protection for all content at a particular maturity level for Netflix accounts, PIN protection for a specific series or film provides families with an additional tool to make decisions they are comfortable with.

In addition, we will also begin displaying more prominently the maturity level rating for a series or film once a member hits play on a title. While these maturity ratings are available in other parts of the experience, we want to ensure members are fully aware of the maturity level as they begin watching.

We are also continuing to explore ways to make this information more descriptive and easier for our members to understand with just a quick glance. One of the great benefits of internet TV is that it allows for amazing variety and provides viewers with complete control over their experience.

At Netflix, we are proud to create and deliver to our members a large catalog of compelling stories crossing many genres from all over the world, while also giving them great control over how and when to enjoy them.

These latest steps are part of our continuous efforts to keep members better informed, and more in control, of what they and their families choose to watch and enjoy on Netflix.”

NFLX is up $11.0 to $312.89.


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Asia Pacific Wire and Cable is in play

Lonsin Capital submits indication of interest to acquire majority of APWC

Lonsin Capital submits indication of interest to acquire majority of APWC. Stockwinners.com
Lonsin Capital submits indication of interest to acquire majority of APWC

LONSIN Capital Limited, together with its affiliates, representing over 5% of the shares outstanding of Asia Pacific Wire and Cable (APWC) on February 23, 2018 wrote to the Board of Directors of the Company and to the Board of Directors of the main Shareholder Pacific Electric Wire and Cable Co. the intention of interest to acquire a majority of APWC US at $4.00 per share.

The proposal would represent a 62% premium to February 22, 2018 ‘s close of $2.475 and a 47% premium to the five-year average closing price on NASDAQ.

LONSIN said, “LONSIN has expressed concern to the management, both orally and in writing, concerning the failure of the Company to take sufficient action to enhance shareholder value and to include an additional independent director on the Company’s board of directors over time.

On May 18, 2016 LONSIN wrote a requisitioned, open letter to the Board of Directors of APWC asking the Board to consider a range of measures that could help deliver enhanced shareholder value without much cost to the Company.

The Board responded by stating that they ‘took very seriously concerns about shareholder value.’…In light of the underwhelming track record of the incumbent Board and Management of APWC over the short, medium and longer term, LONSIN believes that the acquisition of the majority stake would bring ‘fresh impetus’ to APWC’s assets and ‘swiftly deliver enhanced value for all shareholders.'”

A response received from the Board of PEWC’s US legal counsel, Michael Hagan, on February 27, 2018 states that the “LONSIN letter has been circulated to the board for their consideration.”

The response goes on to state that “a substantive response to the LONSIN offer” will be issued in due course but it is unlikely to be before the March 8, 2018 owing to existing commitments of the directors.

APWC closed at $2.50.


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Comcast tops Fox offer for Sky

Comcast tops Fox offer for Sky with $31B acquisition proposal 

Comcast tops Fox offer for Sky. Stockwinners.com
Comcast tops Fox offer for Sky

Comcast (CMCSA) announced a possible offer which it says is a “superior cash proposal” to acquire Sky (SKYAY).

Comcast’s announcement of a superior cash proposal of GBP 12.50 per share represents a 16% increase in value over the existing 21st Century Fox offer (FOXA) for Sky.

Comcast’s superior cash proposal implies an equity value of $31B for Sky.

“A combination would bring attractive financial benefits to Comcast shareholders, and is expected to be accretive to Comcast’s free cash flow per share in year one…The acquisition would enhance the entertainment, distribution, and technology leadership of Comcast, and importantly expand Comcast’s international footprint to more effectively compete in the rapidly changing and intensely competitive entertainment and communications landscape.

The combined business would create compelling opportunities for growth and innovation,” Comcast said in a statement.

“We think Sky is an outstanding company. It has 23 million customers and leading positions in the UK, Italy, and Germany. Sky has been a consistent innovator in its use of technology to deliver a fantastic viewing experience and has a proud record of investment in news and programming. It has great people and a very strong and capable management team.

Comcast intends to use Sky as a platform for growth in Europe. We already have a strong presence in London through our NBCUniversal international operations, and we intend to maintain Sky’s UK headquarters. Adding Sky to the Comcast family of businesses will increase our international revenues from 9% to 25% of Company revenues,” said Brian Roberts, CEO of Comcast.

SKYAYA closed at $61.60.


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Changes to S&P MidCap 400, S&P SmallCap 600 indices

Changes to S&P MidCap 400, S&P SmallCap 600 indices

Stocks to buy, stocks to watch, upgrades, downgrades, earnings
Changes to S&P MidCap 400, S&P SmallCap 600 indices

S&P Dow Jones Indices will make the following changes to the S&P MidCap 400 and S&P SmallCap 600:

S&P SmallCap 600 constituent Boyd Gaming (BYD) will replace CalAtlantic Group (CAA) in the S&P MidCap 400, and Ring Energy (REI) will replace Boyd Gaming in the S&P SmallCap 600 effective prior to the open of trading on Tuesday, February 13.

S&P 500 constituent Lennar (LEN) is acquiring CalAtlantic Group in a deal expected to be completed on or about February 12 pending final approvals.

James River Group Holdings (JRVR) will replace Barracuda Networks (CUDA) in the S&P SmallCap 600 effective prior to the open of trading on Monday, February 12.

Thoma Bravo is acquiring Barracuda Networks in a deal expected to be completed on or about that date pending final conditions.

EVERTEC (EVTC) will replace Sucampo Pharmaceuticals (SCMP) in the S&P SmallCap 600 effective prior to the open of trading on Wednesday, February 14.

S&P 500 constituent Mallinckrodt (MNK) is acquiring Sucampo Pharmaceuticals in a deal expected to be completed on or about that date pending final conditions.


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Callidus Software sold for $2.4 billion

SAP to acquire Callidus Software for $36 per share

SAP to acquire Callidus Software for $36 per share. Stockwinners.com
SAP to acquire Callidus Software for $36 per share

SAP SE (SAP) and Callidus Software (CALD) announced that SAP America, Inc. has entered into an agreement to acquire CallidusCloud.

The CallidusCloud board of directors has unanimously approved the transaction. The per share purchase price of $36.00 represents a 21% premium over the 30-day volume weighted average price per share and a 28% premium over CallidusCloud’s 90-day volume weighted average price per share.

The per share price represents an enterprise value of approximately $2.4B. SAP has elected to fund the transaction with existing cash balances and an acquisition term loan.

The transaction is expected to close in Q2, subject to approval from CallidusCloud stockholders, clearances by the relevant regulatory authorities, and other customary closing conditions.

The transaction is expected to be essentially neutral to SAP’s non-IFRS EPS for FY18 and accretive to SAP’s non-IFRS EPS for FY19.

Upon completion of the transaction, SAP expects to consolidate all CallidusCloud product assets within SAP Hybris solutions as part of SAP’s Cloud Business Group.

The existing management team will continue to lead CallidusCloud. The SAP Cloud Platform is to be used for the technical integration of CallidusCloud solutions.


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Barron’s is bullish on Pfizer, Amgen and FAANG stocks

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

 

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH    MENTIONS:

FAANG stocks still have room to run – The FAANGs – Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google’s parent Alphabet (GOOG; GOOGL) – “took it on the chin” from critics and investors this past week but despite any woes, it is not time to dump them just yet, Ben Levisohn writes in this week’s edition of Barron’s. While concerns could limit gains in the short term, other factors suggest they have more room to run, he adds.

 Franklin may be ‘a bargain’ given potential return of cash – With the new tax law, Franklin Resources is likely to repatriate a significant amount of that cash and may distribute a chunk of it to shareholders, Andrew Bary writes in this week’s edition of Barron’s. Cash represents some 42% of Franklin’s current share price of $44, and its real estate could be worth another $2-$3 a share, he adds.

 Pfizer, Amgen among ‘good bets’ in pharma/biotech – Pfizer (PFE), Amgen (AMGN), AbbVie (ABBV), Elli Lilly (LLY), Bristol-Myers Squibb (BMY) and Johnson & Johnson (JNJ) have strong prospects, promising product pipelines, and good dividends that should keep growing, Lawrence Strauss writes in this week’s edition of Barron’s.

Under hostile takeover, Qualcomm tries offense – Qualcomm (QCOM), which is under a hostile takeover by Broadcom (AVGO), announced new radio frequency business, signaling a greater will to fight back and even go to the offense, Tiernan Ray writes in this week’s edition of Barron’s. Qualcomm’s new business could put pressure on Broadcom and, at the very least, may suggest the latter will have to raise its bid if it hopes to succeed, he adds.

Vivendi music holdings could be worth over $40B – The music business is headed for a growth spurt, as more listeners sign up subscription services such as Spotify, Jack Hough writes in this weekend’s edition of Barron’s. That is good news for rights owners like Vivendi, he adds. With a hand in music, TV and video games, Vivendi (VIVHY) is valued at $37B, but its music holdings alone could be worth more than $40B, thanks to streaming, the report notes.

BEARISH  MENTIONS

Still a long road ahead for self-driving vehicles – Dozens of companies presented driverless technology at the annual Consumer Electronics Show, Jon Swartz writes in this week’s edition of Barron’s. But while optimism about the growth of the market comes as consumers appear to become more comfortable with self-driving “robo-taxis,” the technology has not quite arrived, he notes, adding that autonomous cars are pricey and with drivers ready to take the wheel as a safety buffer. Among the players of the crowded road to the self-driving future are Alphabet (GOOG; GOOGL), Tesla (TSLA), BMW (BMWYY), Ford (F), Toyota Motor (TM), General Motors (GM), and Volkswagen (VLKAY), the report notes.


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Barron’s is bullish on Gold and FedEx, bearish on Caterpillar

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS:

FedEx EPS (FDX) growth should more than triple next year – U.S. postal rates look likely to rise, pinching Amazon (AMZN) and benefiting FedEx and UPS (UPS), Jack Hough writes in this week’s edition of Barron’s. While for now UPS enjoys higher profit margins, investors should favor FedEx as years-long investment in automating and expanding its hubs has given the company a speed and efficiency advantage over the former, he adds. Earnings per share growth for FedEx should more than triple next year as tax cuts kick in, the report notes.

Deal makers now ‘on the clock.’  – Deal makers may be on the clock, especially if one believes that the bull market is in its waning stages and the Federal Reserve is serious about interest rate hikes, Alex Eule writes in this week’s edition of Barron’s. 2018 merger speculation already kicked off in a big way, with headlines that Amazon (AMZN) could buy Target (TGT) and Apple could acquire Netflix (NFLX), he notes, adding that M&A may be necessary to grow and even to survive.

Valero, Home Depot among companies expected to raise dividend – Charles Schwab (SCHW), Home Depot (HD), Valero Energy (VLO), NextEra Energy (NEE), Allstate (ALL) and Cisco Systems (CSCO) are among the large companies expected to announce healthy dividend increases soon, Lawrence Strauss writes in this week’s edition of Barron’s. These projected boosts come amid a solid outlook for dividend growth in the U.S. and globally, he adds.

Intel not to be blamed for failures of computer security – Intel (INTC) came under fire for the revelation that its chips were vulnerable, but the nature of technology and how the industry approaches computer security are the real problem, not Intel chips, Tiernan Ray writes in this week’s edition of Barron’s. There may be things Intel can do, and in fact AMD (AMD), whose chips run the same software, said its products are less vulnerable than Intel’s, he notes, but difference here are just relative as hackers’ inventiveness will continue.

Kohl’s making right moves to grow earnings. – Until recently, Kohl’s (KSS) was largely written off as a casualty of Amazon’s (AMZN) domination of the retail sector, but the stock has become one of the hottest plays in retail as investors increasingly believe that the e-Commerce giant could acquire the company, Steven Sears writes in this week’s edition of Barron’s. Even without Amazon, Kohl’s seems to be making the right moves to grow earnings, he adds.

Gold rally may be ‘just the start.’  – Gold’s recent rally could be just the start, and investors betting on a new bull market in gold can buy physical gold, mining stocks or funds that track the metal and mining shares, with junior miners typically outperforming big-caps in a gold bull market, John Kimelman writes in this week’s edition of Barron’s. Publicly traded companies in the sector include Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG) and Agnico Eagle (AEM).

BEARISH  MENTIONS:

Bank earnings could ‘be messy.’ – The backdrop for banks could not be much better but earnings season is about to begin – with JPMorgan (JPM), Wells Fargo (WFC) and PNC Financial (PNC) expected to report on Friday – and it could “be messy,” Ben Levisohn writes in this week’s edition of Barron’s. While tax reform should be a boon for banks, it will also produce one-time charges and gains that will need to be accounted for, he adds.

Time to sell Caterpillar – In a follow-up story, Barron’s says that with Caterpillar (CAT) soaring, it is time to sell. Investors should not expect the stock to move quickly from here, as cyclical companies like Caterpillar tend to trade at high multiples of earnings at the bottom of the cycle and low multiples at the top, it adds.


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Box Office Battle for the New Year’s weekend

Box Office Battle: ‘Star Wars: The Last Jedi” wins New Year’s weekend

Box Office Battle: 'Star Wars: The Last Jedi'' wins New Year's weekend. Stockwinners.com
Box Office Battle: ‘Star Wars: The Last Jedi” wins New Year’s weekend

Disney (DIS) and Lucasfilm’s “Star Wars: The Last Jedi” has crossed the $1B mark at the global box office in a relatively strong New Year’s weekend in terms of moviegoing.

The film stayed atop the box office chart throughout the holidays, grossing another $52.7M from over 4,200 theaters for the three-day and $68.1M for the four-day holiday weekend. “The Last Jedi” received an A CinemaScore and got a 91% from Rotten Tomatoes.

BOX OFFICE RUNNERS-UP

Sony’s (SNE) “Jumanji: Welcome to the Jungle” came in second, with the reboot grossing $50.4M domestically from 3,765 locations for the three days and an estimated four-day haul of $66.5M.

Behind it was Comcast’s (CMCSA; CMCSK) “Pitch Perfect 3,” earning $16.8M from 3,468 theaters for the three days and an estimated $21M for the four-day weekend.

21st Century Fox’s (FOXA) “The Greatest Showman” placed number four, with $15.6M from 3,316 theaters for the three days and a projected four-day gross of $20.8M.

Rounding out the top five, “Ferdinand” is projected a four-day weekend of $14.6M. Other publicly traded companies in filmmaking include Viacom (VIAB), Lionsgate (LGF.A), and Warner Bros. (TWX).


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Barron’s is bullish on Apple, Western Digital

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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Stockwinners offers Barron’s review 

BULLISH  MENTIONS

Apple may hit $1T in market value next year- Apple (AAPL) could soon reach a milestone, namely to be the first U.S. company with a $1T market valuation, with iPhone X and a rising stream of service revenue helping it get there, Jack Hough writes in this week’s edition of Barron’s. Hough does not thing the peak is near as Apple seems to be escaping its product supercycle peaks and troughs to post more-consistent year-to-year growth.

Opportunity seen in semiconductors as Bitcoin plummets on Friday – Last Friday, the price of Bitcoin plummeted over 25% before bouncing back, and no major crypto asset was immune to the selloff, with even Bitcoin Investment Trust momentarily changing hands at more than a 5% discount of its NAV, Crystal Kim writes in this week’s edition. But in every “bloodbath” there is an opportunity to buy, she adds, noting that while bitcoin is a possibility, a better one may be the stocks of semiconductors companies that make the chips and equipment needed to mine bitcoin and other cryptocurrencies.

Some tech still a bargain– For investors looking to buy low, there are a number of good candidates to pick up, such as Qorvo (QRVO) that features in Apple’s (AAPL) iPhone and Finisar (FNSR) that also got the nod from Apple to produce parts for augmented reality and that may be a target for Oclaro (OCLR), Tiernan Ray writes in this week’s edition of Barron’s. Additionally, Ray sees Universal Display (OLED) as the biggest beneficiary of the iPhone rise, while Cisco Systems (CSCO) should get a lift from the new tax law.

PG&E looks like a buy– A sharp drop last week in shares of PG&E (PCG) could present a buying opportunity, Andrew Bary writes in this week’s edition of Barron’s. Shares of California utilities Sempra Energy (SRE) and Edison International (EIX) also fell this past week amid concerns about their liability for this month’s wildfire outbreak in Southern California, Barron’s adds.

Investors should give REITs a chance – Income investors should give real estate investment trusts a chance, Bill Alpert writes in this week’s edition of Barron’s. Among REITs with nice payouts are Macerich (MAC), Simon Property Group (SPG), Agree Realty (ADC), National Retail Props (NNN) and Realty Income (O), he contends

Western Digital (WDC) could be worth $120 – Flash-memory prices are expected to fade in 2018, which has worried investors in Western Digital, Andrew Bary writes in this week’s edition of Barron’s. However, at $83, Western Digital shares look undervalued, as the stock could be worth $120 at $10 a share in free cash flow, Bary notes.

BEARISH  MENTION

 Bitcoin bourses should be avoided by small traders – Derivatives exchanges Chicago Board Options Exchange (CBOE) and CME (CME) recently launched futures trading on the digital cryptocurrency bitcoin, but these securities do not trade actual bitcoin and are instead based on indexes of bitcoin prices that are calculated differently, Theresa Cary writes in this week’s edition of Barron’s. Putting aside the risk reflected in last week’s bitcoin plunge, these are not retail-friendly products in their current form, she notes, adding that market observers expect that to change over the next six months.

Cryptocurrency mania may not end well – Cryptocurrency mania is obvious in the stock market activity of companies like beverage seller Long Island Iced Tea (LTEA), with shares soaring after the company said it would change its name to Long Blockchain, Vito Racanelli writes in this week’s edition of Barron’s. The real risk is regulatory as governments around the world will gradually see the cryptocurrencies as a threat to their fiat currencies and policies, he notes, adding that it is a mania and eventually the bubble will pop amid tears.


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Barron’s is bullish on Alaska Air

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:  

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS

Alaska air should bounce back in 2018 – While shares of Alaska Air (ALK) are down over 20% this year, they should get back up in 2018, Strauss writes in this week’s edition of Barron’s. With a lower valuation and a better dividend yield than many rivals, the company should rise after if fully integrates Virgin Air, which already is adding to earnings, he notes.

CBOE should not be treated as ‘set and forget’  – Bitcoin futures have pushed CBOE’s (CBOE) stock to a new record high, and some see the stock as a way to benefit from investors fascination with Bitcoin, Steven Sears writes in this week’s edition of Barron’s. However, Sears is recommending that investors no longer treat the shares as a “set and forget” position until it is clearer how the Bitcoin ecosystem will influence CBOE.

Spark Therapeutics selloff may be overdone – Spark Therapeutics (ONCE) shares plunged after the company released disappointing results for its hemophilia A treatment, but the selloff may be overdone given the company’s other promising treatments, Andrew Bary writes in this week’s edition of Barron’s.

More consolidation to come after Disney/Fox deal – Netflix (NFLX) success and its high valuation is forcing the rest of the TV work to scramble, Alex Eule writes in this week’s edition of Barron’s. In the wake of Disney’s (DIS) 21st Century Fox (FOXA; FOX) purchase, investors should expect more consolidation to come, he adds. Given that FOX RSN business looks very similar to MSG Networks (MSGN) and with Disney’s deal spurring a new wave of RSN interest, 208 could be the year that MSG gets sold, Barron’s says. Other potential attractive targets include AMC (AMCX) and Viacom (VIAB), Eule contends.

BEARISH  MENTIONS

Exxon (XOM) disclosure of climate-change regulation impact has risks – In a filing with the Securities and Exchange Commission, Exxon’s board acceded to a proxy request to disclose more about what tightening climate-change regulations may do to the long-term value of its hydrocarbon assets in the ground, Vito Racanelli writes in this week’s edition of Barron’s. Once Exxon discloses this information, companies that do not will be under pressure, he notes, adding that while more disclosure as a rule is good for shareholders, there are risks as it could hurt its competitive position and the ability to sell assets at a fair price.

New Apple iPhone features also bring software bugs – While each new Apple iPhone (AAPL) brings more “dazzling” features, it also brings a rising number of software bugs, Tiernan Ray writes in this week’s edition of Barron’s. Apple has little choice but to keep adding features to stay ahead of the pack, and one large cost is having to divert engineers to fix bugs, he adds.


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Apple becomes Finisar’s Santa Clause

Apple awards Finisar $390M from Advanced Manufacturing Fund

Apple awards Finisar $390M from Advanced Manufacturing Fund. Stockwinners.com
Apple awards Finisar $390M from Advanced Manufacturing Fund.

Apple (AAPL) announced that Finisar (FNSR) will receive $390M from its $1B Advanced Manufacturing Fund.

“The award will enable Finisar to exponentially increase its R&D spending and high-volume production of vertical-cavity surface-emitting lasers.

Apple says that Finisar is going to work on both research & development and high-volume production of optical communications components. The most complicated components are the vertical-cavity surface-emitting lasers (VCSELs) used in the iPhone X for Face ID, Animoji, Portrait mode and other face-mapping technologies.

But Finisar also works on proximity sensors including the ones in the AirPods.

And it’s quite easy to understand why Apple is investing in Finisar. There are simply not enough suppliers in this field today. In the fourth quarter of 2017 alone, the company will purchase 10 times more VCSEL wafers than the entire VCSEL production in the world during the fourth quarter of 2016. So Apple needs to foster production.

VCSELs power some of Apple’s most popular new features, including Face ID, Animoji and Portrait mode selfies made possible with the iPhone X TrueDepth camera, as well as the proximity-sensing capabilities of AirPods,” Apple said in a press release.

It added that Finisar will transform a 700,000-square-foot manufacturing plant in Sherman, Texas, into the “high-tech VCSEL capital of the US.”

Apple’s award will create more than 500 high-skill jobs at the Sherman facility.

FNSR closed at $19.30. It last traded at $23.00.


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Barron’s is bullish on Salesforce.com

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names: 

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Stockwinners offers Barron’s review of stocks to buy, stocks to watch

BULLISH  MENTIONS

Johnson & Johnson (JNJ) could rise further – In a follow-up story, Barron’s notes that Johnson & Johnson’s shares had a blockbuster year, as concerns about its big rheumatoid-arthritis drug Remicade proved too pessimistic, but shares could rise almost 20% as investors view the company’s drug pipeline in a new light.

Companies trading mostly in U.S. to benefit from tax reform – Investors in companies that trade mostly in the U.S. such as Southwest Airlines (LUV) should benefit greatly from what is arguably the signature provision of the tax reform bill, namely a drop in the federal corporate tax rate, John Kimelman writes in this week’s edition of Barron’s. Tech giants such as Apple (AAPL), Microsoft (MSFT) and Alphabet (GOOG; GOOGL) should experience a huge windfall from the legislation’s provision that could set the rate on the taxes of foreign earnings held in cash as low as 10%, thus encouraging repatriation, he says.

Transfer Partners situation to be resolved by 2019/2020 – Master limited partnerships have been dogged for the past several years by investor concerns, with Energy Transfer Partners (ETP) being one of the worst-performing large MLPs, Andrew Bary writes in this week’s edition of Barron’s. Its unit price has tumbled since the merger with Sunoco Logistics, even as the units of its sister company, Energy Transfer Equity (ETE) have held steady, he adds. The endgame probably will be a merger of the two companies, or an equity buyout of the IDRs by Energy Transfer Partners, Barron’s contends.

Start-ups dwelling in tech giants shadow – Tech giants such as Amazon (AMZN), Alphabet (GOOG; GOOGL) and Apple (AAPL) show no signs of slowing down, increasingly calling the shots in tech in a way that limits the scope within which small companies operate, Tiernan Ray writes in this week’s edition of Barron’s. While many start-ups show promise but “dwell in the shadow of the giants,” he adds. Commenting on recent IPOs, Barron’s notes that while Appian (APPN) and Roku (ROKU) have surged 39% and $85% respectively, cloud-computing darlings Mulesoft (MULE) and Tintri (TNTR) are down since their debuts.

Wall Street about to join in Bitcoin fun – Bitcoin shot past $11,000 last week but slid sharply right after before surging yet again, Avi Salzman writes in this week’s edition of Barron’s. Now Wall Street is about to join in the fun, he notes, adding that getting listed on some of the largest exchanges in the country is a “tectonic shift for Bitcoin.” Banks like Goldman Sachs (GS) are considering helping clients execute Bitcoin trades, and once “they dip their toes in,” there may be no turning back, Salzman contends.

 Salesforce.com has 25% upside – As Salesforce (CRM) launches new products, its “addressable market” expands, which means more opportunities for sales and potentially wider margins, Jack Hough writes in this week’s edition of Barron’s. The company’s shares should continue to outperform as revenue rises and margins improve, and a 25% increase in 2018 to $130 seems achievable, he adds.


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Barracuda Networks sold for $1.6 billion

Barracuda agrees to be acquired by Thoma Bravo for $27.55 per share in cash

Barracuda Networks (CUDA) announced that it has entered into an agreement to be acquired by private equity investment firm Thoma Bravo in an all-cash transaction valued at $1.6B.

Barracuda shareholders of record will receive $27.55 in cash for each share of Barracuda common stock they hold.

This price exceeds Barracuda’s 52-week high and represents a premium of 22.5% to the company’s 10-day average stock price prior to Nov. 27, the company noted.

Upon the close of the transaction, Barracuda will operate as a privately-held company with a continued focus on email security and management, network and application security, and data protection solutions that can be deployed in cloud and hybrid environments.

The proposed transaction, which has been unanimously approved by Barracuda’s Board of Directors, is expected to close before Barracuda’s fiscal year end of Feb. 28, 2018, and is subject to approval by Barracuda’s shareholders and regulatory authorities, and the satisfaction of other customary closing conditions.

CUDA closed at $23.69.


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DOJ to block AT&T and Time Warner’s merger

Analysts cut Time Warner, AT&T targets following DOJ lawsuit

Time Warner Name to Become History, See Stockwinners.com Market Radar

Following the news that the U.S. Department of Justice is suing to block AT&T (T) and Time Warner’s (TWX) merger deal, several Wall Street analysts lowered their price targets for both names.
Nonetheless, Baird analyst William Power argued that he sees the merits of the antitrust case favoring AT&T.

DOJ LAWSUIT

Yesterday, the U.S. Department of Justice announced that it is suing to block the deal agreed to between AT&T and Time Warner.
Commenting on the news, AT&T’s Senior Executive VP and General Counsel David McAtee II said the DOJ lawsuit is “a radical and inexplicable departure from decades of antitrust precedent.”
He added: “Vertical mergers like this one are routinely approved because they benefit consumers without removing any competitor from the market.
We see no legitimate reason for our merger to be treated differently. […] Fortunately, the Department of Justice doesn’t have the final say in this matter. Rather, it bears the burden of proving to the U.S. District Court that the transaction violates the law. We are confident that the Court will reject the Government’s claims and permit this merger under longstanding legal precedent.”

PRICE CUTS

In light of the news that the DOJ will be suing to block the merger, Wells Fargo analyst Marci Ryvicker lowered her price target for Time Warner to $84 from $100 to reflect its standalone value.
Looking at Time Warner purely on fundamentals, the analyst told investors that she is not totally sure 2018 estimates are accurate given that the company has given no sense of trends for next year.
While #Ryvicker acknowledged that many investors have asked what Time Warner is worth, she does not think anyone steps in for it. The analyst reiterated a Market Perform rating on Time Warner’s shares.
Her peer at Barclays also cut his price target for Time Warner to $92 from $107.
Analyst Kannan #Venkateshwar argued that the DOJ move “in effect goes against almost 40 years of judicial commentary and action and, therefore, is quite unprecedented.”
Based on past DOJ frameworks, the analyst believes it may be tough for it to establish competitive harm, but the companies are likely in a 4-6 month period of litigation that should delay not only the closing of the deal but may also “chill other M&A activity across the space.”
Absent a deal, Venkateshwar estimates Time Warner could trade at $77 per share.
Meanwhile, Nomura Instinet analyst Jeffrey Kvaal lowered his price target for AT&T shares to $42 from $45 as he considers shares on fundamentals, while noting that he did not cut his target post the third quarter video miss given the pending deal.
Nonetheless, Kvaal told investors he believes the shares have “room to run” with or without Time Warner.

CASE MERITS FAVOR AT&T

Commenting on the lawsuit, Baird analyst William Power argued that the merger deal may be delayed, but is not dead.
The analyst argued that with Facebook (FB), Google (GOOG; GOOGL), Amazon (AMZN) and Netflix (NFLX) now media forces, including in original content, he finds it difficult to believe that AT&T will be able to significantly raise pricing for the Turner properties or HBO and risk driving away current partners.
Ultimately, Power believes the merits of the case favor AT&T. The analyst reiterated an Outperform rating and $42 price target on AT&T shares.

PRICE ACTION

In Tuesday’s trading, shares of Time Warner have gained over 1% to $88.79 while AT&T is fractionally down to $34.42 per share.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.