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Trading in shares of Netflix Inc. (NASDAQ: NFLX) gave an interesting pre-market alert at Volume Spike this morning. The DVD rent-by-mail service is feeling pain early this morning after offering some very mixed guidance.
Despite the realm of uncertainties we all face, there is one sector which has survived through the good times and bad times of the last century: movies. Movies haven't even been killed by the digital revolution as so many feared could happen in the 1990's. The FT reported this morning that The Blackstone Group (NYSE: BX) and a unit of JPMorgan (NYSE: JPM) were set to announce a financing package of more than $1 billion to fund the conversion of up to 20,000 cinema screens in the US to digital projection systems. Access Integrated Technologies, Inc.(NASDAQ:AIXD), which goes by AccessIT, would likely be one of the key beneficiaries of such a large financing package.
Continue reading "Possible Digital Cinema Financing Winners (BX, JPM, AIXD)" »
The self-study language tutorial company Rosetta Stone Inc. plans to go public via an initial public offering. The company has not listed any amount in shares or any indicated prices, but for filing purposes it showed a sale of as much as $115 million in securities. The underwriting group is rather large: Morgan Stanley, William Blair, Jefferies, Piper Jaffray, and Robert W. Baird.
There have been interesting developments in Focus Media Holding Limited (NASDAQ: FMCN) that might have otherwise garnered more media attention for growth investors had the financial markets not been in such turmoil. Interestingly enough, this stock recovered before the news with the markets last week and has since traded up even more. Its stock was as low as roughly $22.00 last Wednesday. On Friday, the Chinese outdoor advertising giant said its subsidiary Allyes Online Media Holding Ltd. has submitted data to the SEC to go public via an initial public offering.
Continue reading "Does Focus Media Fully Reflect Allyes IPO Value? (FMCN)" »
Take-Two Interactive (TTWO) could have taken an overly generous offer from Electronic Arts (ERTS). Instead, it held out for a higher price and hinted that it had other buyers.
The ERTS bid was worth $25.74. Take-Two changed hands at about $15 before the offer. Today its shares are off 28% to $15.75.
The board and management may want to find themselves outstanding attorneys.
Douglas A. McIntyre
Electronic Arts Inc (NASDAQ:ERTS) has confirmed the release of the Harry Potter video game, although this might not be good as you'd think for a "feed me now" attitude on Wall Street. The video game giant and Time Warner Inc.'s (NYSE: TWX) Warner Bros. Interactive Entertainment will issue the game for "Harry Potter and the Half-Blood Prince™" video game next summer. This puts it essentially alongside the Warner Bros.’ film. on J.K. Rowling’s sixth Harry Potter book.
Continue reading "Electronic Arts Defines Financial Delays To Harry Potter Game (ERTS, TWX)" »
Zumiez Inc. (NASDAQ: ZUMZ) was halted pending news into earnings. The snowboarding (as well as skateboarding, BMX, and action sports) apparel and outdoor wear retail and apparel company posted $0.09 EPS on $92.3 million in revenues, compared to $0.07 EPS and $92.64 million revenues.
Continue reading "Zumiez, Same Store Sales Down Now & Ahead (ZUMZ)" »
On today's Olympics-shortened and rescheduled MAD MONEY on CNBC at 1:30 PM EST, Jim Cramer actually hosted Martha Stewart, founder of Martha Stewart Living Omnimedia Inc. (NYSE: MSO).
It's probably no surprise, but Cramer and Martha were both bullish on the company and the brand. She said the damage has been repaired, advertisers are back, and the brand stayed strong. She also noted that the company has so many brands that people do not even think of it.
Continue reading "Jim Cramer Takes On Martha Stewart (MSO)" »
Priceline.com Inc. (NASDAQ: PCLN) has just reported earnings. The online travel bidding service posted $1.55 non-GAAP EPS on $514 million in revenues. First Call had estimates of $1.41 EPS on $495.7 million in revenues. Unfortunately, the earnings today are not the only issue traders are focusing on.
Continue reading "Priceline Finally Showing Cracks? (PCLN)" »
lululemon athletica (NASDAQ: LULU) has just come out and filed to sell up to more than 20.9 million shares in a secondary offering. The company says that it may issue these upon the redemption, retraction or purchase of an equivalent number of the exchangeable shares of Lulu Canadian Holding, Inc. (an indirect wholly-owned subsidiary), or upon the liquidation, dissolution or winding up of Lulu Canada.
Continue reading "lululemon Files Share Registration For Canadians (LULU)" »
After today's close, we'll get to see earnings out of the Mouse House from Walt Disney Co. (NYSE: DIS). First Call has estimates of $0.61 EPS on $9.14 Billion in revenues for this quarter. Estimates are $0.52 EPS and $9.37 Billion next quarter and are coming in at $2.32 EPS on roughly $37.7 Billion for its Fiscal September-2008. As you will see below, there are some very critical levels to watch today.
Continue reading "Disney Earnings Preview: Hannah vs. Mickey (DIS)" »
Executives at Time Warner (TWX) can enjoy their time this summer at their mansions and on their yachts. The company's Warner studio's latest film, "Dark Knight", part of the Batman series, has taken in $155 million.
The opening weekend box office figure is the largest for any film in history. Can anyone say $1 billion?
Douglas A. McIntyre
Sirius Satellite Radio Inc. (NASDAQ: SIRI) and XM Satellite Radio Inc. (NASDAQ: XMSR) are both trading higher pre-market on reports that the last FCC commissioner will back the merger if the companies agree to additional conditions. FCC Chairman Kevin Martin has already supported the merger despite all of the congressional special interests and the RIAA objections to this competing against terrestrial radio.
Apparently the newest requests are for a 6-year pricing cap and a request for one-quarter of the programming to be made available for minority or public interests. Interestingly enough, we noted over at VOLUME SPIKE (VSInvestor.com) that there was very unusual options activity around this situation.
After this merger has been in the pending file for 18 months, we'd imagine that both satellite companies will capitulate to these demands even if they sue to break them because of "pricing pressure" in an inflationary environment or over lack of feasibility on the additional programming side.
Sirius shares are up over 3% at $2.17 on over 350,000 shares and XM shares are up almost 5% at $8.85 on 44,000 shares in pre-market trading.
Jon C. Ogg
July 18, 2008
Premier Exhibitions, Inc. (NASDAQ: PRXI) has announced this morning that its RMS Titanic, Inc. subsidiary has entered into an agreement to present a new Titanic exhibition and tour sponsored by a major financial services provider. The mobile version of its "Titanic: The Artifact Exhibition" will feature objects from its vast collection of roughly 5,500 artifacts recovered from Titanic's debris field.
This exhibit is meant top be a mobile exhibit for museums as it will travel to major cities throughout the United States with dates and location T.B.A.
RMS Titanic, Inc. owns the salvage rights to the Titanic wreck site and is the only company permitted to recover objects from the wreckage area after it was granted exclusive Salvor-in-Possession rights by a U.S. federal court in 1994. The company has conducted seven research and recovery expeditions to the Titanic rescuing more than 5,500 artifacts.
Jon C. Ogg
July 8, 2008
Steven Spielberg and his friends at movie studio Dreamworks are in the process of raising $500 million to $600 million from India's Reliance ADA Group. Dreamworks is now part of the Paramount operations of Sumner Redstone's Viacom (VIA).
According to The Wall Street Journal, "The film industry has been closely monitoring the fate of the 61-year-old Mr. Spielberg and partner David Geffen, co-founders of DreamWorks SKG."
Whether it was a faux pas or an intentional statement, Sumner Redstone's puppet CEO at Viacom, Philippe Dauman, said that Dreamworks was "completely immaterial" when it came to the parent company's financial future.
Dauman may be right. Big movies still make money, sometimes a lot of it. But, budgets for blockbusters can run close to $200 million, which makes them risky. Pay-per-view and DVD sales help offset that. But, films are pirated on file-sharing services and in countries like China and Russia, so the film business is not what it once was.
Recent research from comScore shows that Americans watched 11 billion videos online in April. Even if each video is short, that eats up a lot of time. People can only watch so much. Then their eyes fall out of their heads.
Most analysts think that online operations like YouTube, which make up most of the internet video content, can't make money. Big advertisers like Procter & Gamble and GM don't want their nice marketing messages next to videos of farting preachers. Who can blame them? But, that is what people spend their time watching.
The YouTube viewer may be a buffoon, but he is a buffoon in the majority, watching those 11 billion videos. He can't make it to the movies. Where will he find the time? Spielberg can leave Viacom. He is too expensive to keep.
Douglas A. McIntyre
Disney (DIS) has recruited another clueless child, whose parents are undoubtedly surfeited with the idea of becoming multimillionaires, to be its next multimedia star.
The new member of Disney's stable is Demi Lovato, who is 15 but looks 27. She joins Miley Cyrus, who is also known as "Hannah Montana" to make records, movies, and TV shows. According to The Wall Street Journal, "For Disney, there are few more crucial tasks than finding and developing talent that appeals to 8- to 12-year-olds."
The moves may be good for Disney, but who remembers childhood stars Drew Barrymore and Britney Spears. Spear is so crazy that she roams the moors of Hollywood like the hound of the Baskervilles.
Of course, there is no guarantee that the entertainment company's latest star will run into personal trouble over time, but the odds are not in her favor.
Douglas A. McIntyre
What sort of would it be if you could only bet on sporting events by the results only? Who knows how much the bets were on the actual match going into sudden death today, but you can bet it was significant. It turns out there were traders pushing around brands of public companies as well, mainly that of Callaway Golf Co. (NYSE: ELY) and that of Nike Inc. (NYSE: NKE).
The reason is rather simple. Nike is now almost synonymous with Tiger Woods, and Callaway Golf is a large endorser of Rocco Mediate. To add more of a small twist Callaway shares have been under pressure because of recent earnings news.
Callaway shares rose 3% to $12.66 in regular trading as the pure-play golf apparel and equipment company, and its 52-week trading range was $12.00 to $19.49. Callaway's shares are down over 1% at $12.50 in after-hours trading.
Nike Inc. (NYSE: NKE) closed down almost 0.9% at $68.38, and shares were down 0.2% at $68.19 in after-hours trading. As it is exponentially larger and far more diversified this was hardly the play. Its 52-week trading range is $51.50 to $70.60.
This was almost a huge day for Callaway, but based upon the news and coverage the company won either way. Whether or not that translates to a stock event... that's a different issue entirely.
Jon C. Ogg
June 16, 2008
Focus Media Holding Ltd. (NASDAQ: FMCN) has just posted earnings. Despite beating estimates, Wall Street isn't trusting its guidance issues "from the earthquake."
Total GAAP revenues grew 214.7% year-over-year to $161.6 million. GAAP net loss for the first quarter was $53.8 million or -$0.42 EPS (ADS) after a non-recurring loss of $79.3 million resulting from the restructuring. On a non-GAAP basis outside of restructuring and other items it recorded $44.8 million in net income with $0.34 non-GAAP EPS. First Call had estimates at $162 million in revenues and $0.33 EPS.
This is probably not a huge shock when you consider its business, but the company noted that the earthquake in Sichuan province is going to bring down some adjusted ad numbers:
Because this ad company has a premium to it and because of the China syndrome, Wall Street isn't giving the company any break at all over the earthquake being tied to the revenues. Shares were up 2.6% today at $36.79 in regular trading, but shares are down almost 7% at $34.31 in after-hours trading.
Jon C. Ogg
June 5, 2008
Eastman Kodak Co. (NYSE: EK) announced today that it will increase prices on certain consumable products by up to 20%. You can guess the reason: soaring materials costs and the rise of petroleum. Kodak's implementation date is July 1, and this will be rolled out by groups and by geography over the next few weeks.
The company said the worldwide price increases should give it a break over some of the impacts of spiking costs in raw material. As it is still a mega-consumer of silver costs and as it has energy intensive demands, it isn't hard to fathom that this was coming down the pipe.
Unfortunately, Kodak already posted a first-quarter loss even outside of its restructuring charges. The company thinks that it completed a multi-year restructuring process as it tries to shift its focus away from film and into digital. Good luck on thinking that restructuring is done though.
The company managed to get these price hikes announced right before that solid wave of higher demand for physical film. Oh wait, this is 2008 rather than 1988. If the company can charge more and more for products that people are using less and less, then more power to them.
Based upon the stock being down at $15.32 and with it having hit a 52-week low today, this price hike is probably going to be ignored and absorbed. At least with the weak dollar Fuji is more expensive for the U.S. consumers in theory.
We have questioned what this company can do over and over to improve, even back when shares were at $25.00. Good luck to Kodak, sounds like they'll need it.
Jon C. Ogg
May 30, 2008
Premier Exhibitions Inc. (NASDAQ: PRXI) has resolved its Attorney General inquiry with the State of New York. This inquiry was a significant overhang on the company, which has been seen in its share prices.
The company will continue to operate the human anatomy exhibition called “Bodies . . .The Exhibition” in New York City. The company has also agreed to make certain disclosures in its exhibition, on its website, and in its New York area advertising regarding the sourcing of the specimens presented in the exhibition.
This was one of the investor issues hanging over the company regarding the cadaver sources or whose cadavers the company was using. Part of the allegations from human rights groups were that the company was using cadavers of executed Chinese prisoners rather than cadavers that were from donors.
Premier has agreed to create an escrow fund of $50,000.00 to reimburse customers who establish that they would not have attended the New York City exhibition had they known the facts set forth. Monies remaining in the escrow account after 8 months that have not been paid to customers will revert back to the Premier.
The Company will retain an independent monitor to ensure compliance with the Assurance agreement and it will pay $15,000.00 to the Attorney General of the State of New York as part of the resolution.
You can read the full ASSURANCE OF DISCONTINUANCE at the company's prxi.com site.
Shares closed at $4.69 yesterday, and the 52-week trading range is $4.27 to $18.62.
For whatever it is worth, if you haven't seen this exhibit in New York or elsewhere it is worth seeing as one of the most unique exhibits available to the public that you will have ever seen.
Jon C. Ogg
May 29, 2008
Blockbuster Inc. (NYSE: BBI) managed to beat earnings expectations this morning. The company posted $0.20 EPS on a 5.4% revenue decrease to $1.39 Billion. First Call had estimates at $0.15 EPS on $1.44 Billion in revenues.
Operating income was $70.2 million. The company's same store sales rose 2.9%, but this was on a smaller number of stores. The company also noted that BLOCKBUSTER Total Access(TM), its subscription rental offering, is now profitable and positioned for growth.
Here were some balance sheet highlights:
Cash and cash equivalents $137.7
Merchandise inventories $397.4
Rental library $444.8
Accounts payable $453.8
Total debt (w/ capital lease
obligations) $751.4
Blockbuster shares are up 10% pre-market at $3.40; its 52-week trading range is $2.52 to $5.80.
Jon C. Ogg
May 15, 2008
Jon Ogg produces and edits the "10 Stocks Under $10" newsletter and he does not own securities in the companies he covers.
IMAX Corporation (NASDAQ: IMAX) is one of the entertainment operations that has been trying to remedy its woes, and its shares at one point were up 100% and more from the 52-week low. This morning the company issued earnings under estimates at -$0.25 EPS on a 12.3% drop in revenues to $23.5 Million. First Call had estimates at -$0.14 EPS on revenues of $25.4 million; and the loss for Q1 2007 was only -$0.12 EPS.
IMAX also noted that the seasonally weak quarter faced difficult comparison because of last year's strong IMAX release of 300. Below are some key metrics for last quarter and this quarter:
A new announcement may mitigate the earnings discrepancy that has been seen this morning, although this is part of an ongoing award. IMAX announced a deal with DreamWorks Animation (NYSE: DWA) to release Madagascar: Escape 2 Africa into IMAX theaters globally on November 7, 2008.
If you look through the numbers, the company's rising cost structure is probably more to blame on the earnings front than anything sinister on the entertainment side:
With a last seen short interest of 2.25 million shares, or about 16-days volume, that may keep the selling from outweighing the buying after this stock opens.
Jon C. Ogg
May 12, 2008
Rick's Cabaret International Inc. (NASDAQ: RICK) may not be one of the most controversial companies out there, but it is definitely one of the stranger stocks out there because of the fact that it is the largest public "gentleman clubs" out there. The company has also grown by acquisitions and the company plans to keep making acquisitions. What is interesting if you look at the company's guidance and do not consider the industry it is in, it is hard to argue against the value of the company from a growth investor mind and from a value investor mind. That's GARP for you.
The company posted earnings yesterday and gave its guidance, which it also gave in a second press release today. For its 2008 fiscal year (Sept-2008 end) the company said it expects approximately $61 to $62 million in revenues. That would put after tax net income around $10.5 to $11 million, which would yield about $1.25 to $1.30 EPS. Its outlook for fiscal Sept-2009 puts revenues exceeding $100 million, and yields a an earnings range of $2.30 to $2.50 EPS.
While the company has very thin analyst coverage, these numbers are well above the two estimates measured by First Call. Fiscal Sept-2008 estimates are $1.17 EPS and about $58 million (top estimate is $1.21 EPS). Fiscal Sept-2009 estimates are $1.88 EPS and almost $79.7 million.
The company did also note different numbers for the calendar years as well, although we wanted to compare the numbers above on an apples to apples basis. These 2008 numbers don't reflect a pending acquisition, but the 2009 numbers do. Between now and then, we won't be surprised if the company has made more acquisitions.
Rick's shares have more than doubled over the last year, and its market cap is now approximately $158 million based upon a $21.00 stock price. As far as forward valuations, for 2008 it has a forward P/E ratio at the Low-end of estimates at 16.8 and trades at roughly 2.5-times revenues. For Fiscal Sept-2009, its forward numbers at its own low-end of estimates are a 9.1 forward P/E ratio and roughly 1.5-times revenues.
We covered this when its market cap had just crossed over $100 million, and you can see how these new projections are ahead of those numbers.
There is no doubt that many cannot own this stock because it falls in the "sin stock" category. But for those who can and if you can trust the company's numbers, then all of a sudden you have a low-multiple growth stock with the potential for close to 90% earnings per share growth. Now that the market cap is north of $100 million, there are also many more funds that are not barred from owning it because many have a $100 million market cap minimum. As long as you are comfortable with the company's projections and as long as you don't mind owning a sin stock, the projections look and sound great.
A college logic class might even deduce that topless bars are nearly recession proof.
Jon C. Ogg
May 9, 2008
Jon Ogg is also a producer and editor of the "10 Stocks Under $10" weekly newsletter; he does not own securities in the companies he covers.
Disney (DIS) had the kind of quarter that a company based on the fantastic should have.
Diluted EPS for the second quarter increased to $0.58, compared to $0.44 in the prior-year quarter. Revenu rose 10% to $8.71 billion. Segment operating income was up 21% to $2.14 billion.
The company's studios were the stars. Their revenue rose 18% to $1.822 billion. Operating income was up 61% to $377 million.
The company's parks did unusually well given the economic slowdown. Revenue rose 11% to $2.725 billion. Operating income was up 33% to $339 million.
Disney's largest division, its media networks, had slower growth with 5% revenue increase and a 14% segment operaing income bump to $1.317 billion. ESPN did well. ABC did not.
In tough times, investors in the company got a trip to Disney Land.
Shares rose 2.7% on the news to $34.60.
Douglas A. McIntyre
Playboy Enterprises, Inc. (NYSE: PLA) has reported a net loss for the first quarter of $3.1 million, or -$0.09 per basic and diluted share, on and 8% decline in revenues to $78.5 million. Unfortunately, First Call had estimates pegged at $0.06 EPS on $84.8 million in revenues.
Playboy Chairman & CEO Christie Hefner said: "The quarter's results reflected the dual challenges of structural transformation in our traditional media business and a difficult U.S. economy...." She might as well have just said, "A soft economy is hurting sales, and people can get enough nude pictures and adult videos for free on the Internet."
While exact guidance was not offered, the company does still expect its licensing business to show high single-digit growth in 2008 over 2007. Elsewhere, the picture was stark. total domestic TV revenues declined 16% to $16.5 million, online revenues declined 3%, and publishing saw revenues drop 14% to $20.1 million. The company also noted that it sees a 5% drop in advertising revenues over Q2 2007. Corporate administration costs rose 7% to $6.1 million.
Unfortunately, this is going to make these 2008 estimates of $0.27 EPS come down for 2008, and it's hard to imagine that the $0.48 EPS estimate for 2009 won't be brought down on a dual concern as well. If so, then even at $8.00 this is not a cheap stock.
Playboy closed at $8.26 yesterday, and shares are indicated down 3% at $8.01 in pre-market trading; its 52-week trading range is $7.76 to $12.00. At the start of 2006, this was a $15.00 stock and this was a $20 to $30 stock back in the late 1990's.
Jon C, Ogg
May 6, 2008
Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) has come out with earnings early this morning at $0.44 EPS from operations excluding special items, or a net of $0.42 EPS. While these numbers are lower than last year, they are well above the First Call estimate of $0.25 EPS.
The hotel and resort operator repurchased approximately 6.1 million shares for approximately $277 million in the first quarter, leaving some $316 million available for repurchases.
The company said that overall lodging trends remain strong, but uncertainty makes predicting results ahead difficult. For next quarter it is targeting $0.50 to $0.54 EPS and for 2008 its target is $2.40 to $2.58 EPS. First Call had next quarter at $0.55 EPS and 2008 EPS at $2.42.
The assumptions are still based around some growth and still based around conditions not deteriorating further, but overall this is a fairly impressive report compared to what the overall expectations would have pointed to.
With over three hours to the open it is too soon to see real indications. Shares closed at $49.62 yesterday, and the 52-week trading range is $37.07 to $75.45.
Jon C. Ogg
April 24, 2008
Private Media Group, Inc. (NASDAQ: PRVT) ia announcing a unique launch with Pilgrim Telephone, Inc. for the U.S. and Canada. This will marry Private' adult entertainment with Pilgrim's social networking services for wireless and wire-line subscribers.
The companies are launching Intimate Connections(R) instant voice messaging platform, which is said to be the first step in the development of Private and Pilgrim's strategic US and Canadian alliance. Fans will have the opportunity to connect with each other and to hear from Private girls and their friends via both wireless and land line telephones.
As far as who the customers of Pilgrim are, it lists LodgeNet Interactive Corporation (NASDAQ: LNET), On Command, New Frontier Media (NASDAQ: NOOF), Playboy (NYSE: PLA), Club Jenna, Digital Playground and Rogers in Canada. Private Media doesn't look like it is a small fry either as it says it's a leader in adult entertainment distributing premium content globally via a wide range of platforms including more than 900 million mobile telephone handsets, IPTV/VOD, broadband Internet, television, DVD's, and magazines.
Interestingly enough, this says that callers spend on average some $50 per call, and the companies expect this to generate substantial incremental revenue for Private going forward. It sure sounds like this is a new play on the old 900-numbers fused with a new social networking slant. Let's just hope that the clients aren't using this while they are driving.
Jon C. Ogg
April 15, 2008
Digital Domain submitted an amendment to its IPO filing this morning. The filing for the offering shows a maximum aggregate offering price of $96.6 million at a maximum offering share price of $14.00 per share for 6 million shares. An actual range has been set at $12.00 to $14.00 per share for this IPO. The company has applied to trade on the NASDAQ Global Market under the ticker “DTWO.” The underwriters are listed as Thomas Weisel Partners, Oppenheimer and Co., William Blair and Company, Merriman Curhan Ford and Company, and GunnAllen Financial, Inc.
California-based Digital Domain is a leading award-winning visual effects and animation company for movies, television advertising, video games, and interactive visual media. Their technology has been used in films such as Titanic, Apollo 13, The Day After Tomorrow, and The Fifth Element and video games like Halo 3. They generated pro-forma year revenues of $66 and $79 million in 2006 and 2007, respectively.
You can join our open email distribution list to hear about buybacks, special financings, secondary offerings, M&A, and more previews for other special situations.
Given the slowdown in consumer spending, companies could be looking to Digital Domain for their advertising. We’ll look to see how hot this IPO comes out.
Rachel Lopez
April 7, 2008
Hasbro, Inc. (NYSE:HAS) has finally purchased all of the intellectual property rights related to the Trivial Pursuit brand from Horn Abbot Ltd. and from Horn Abbot International Ltd. Hasbro paid out an aggregate purchase price of some $80 million to the Horn Abbot companies for the intellectual property rights.
This isn't going to change much about the game itself, but now Hasbro will get to keep everything from the gross sales of the Trivial Pursuit games. Hasbro has developed and marketed Trivial Pursuit under a license agreement from the Horn Abbot companies since 1983. If you trust the Wikipedia numbers, 88 million copies had sold in 17 languages as of 2004.
You should try playing Trivial Pursuit in Spanish against Spaniards who won't let you translate anything besides the Spanish you know... and then winning.
This won't change much about the game itself, although now Hasbro can take it any direction it wants with more offshoots than it already has and can keep all of the pie pieces.
Jon C. Ogg
March 31, 2008
Jon Ogg produces the Special Situation Investing Newsletter and he can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.
AT&T Inc. (NYSE: T) has partnered with MediaFLO USA Inc, a subsidiary of Qualcomm Incorporated (NASDAQ: QCOM), to launch AT&T Mobile TV with FLO. This offering will consist of a mobile TV service featuring high quality live programming.
The mobile TV service will launch in May 2008 on two new exclusive handsets, the LG Vu(TM) and the Samsung Access(TM). AT&T Mobile TV will also feature two exclusive channels, which will be announced soon. This new offering will deliver full-length TV content and sporting events from top networks, including programming from CBS Mobile, Comedy Central, ESPN Mobile TV, FOX Mobile, MTV, NBC 2GO, NBC News2Go and Nickelodeon.
The service will be launched initially on the LG Vu and Samsung Access phones.
For those of you who insist on driving without a headset on the road while you speak on the phone, please don't think this is so cool you can't wait to watch sports or soap operas on that little bitty screen while you are driving.
This may be more of a catch-up move than anything else. Verizon has been offering VCAST for close to 2 years........
Jon C. Ogg
March 27, 2008
Thursday we’ll see earnings out of Carnival Corp. (NYSE: CCL). The estimates from First Call are $0.29 EPS on $3.15 billion in revenues. Next quarter estimates are $0.50 EPS on $3.32 billion in revenues. Estimates for fiscal Nov-2008 are $3.12 EPS on $14.69 billion in revenues.
Analysts have an average price target north of $52.00, more than $14.00 higher than Wednesday's $37.60 close. Carnival’s 52-week trading range is $36.10 to $52.10.
Estimates have come down on this one over the last 90 days, and considering that it's a cruise ship owner and operator and the consumer pocketbook is getting thinner and thinner and thinner. The short interest has also risen on this one to 14.79 million shares, which is almost 4-days to cover. The cruise ship operator stock is also real close to 4-year lows. So if this has any "not so bad numbers" and signals that the rivets aren't popping off the earnings, then we'd be expecting a large move up on short covering mixed with bargain hunters.
We'd note that its performance in recent periods has been similar to that of Royal Caribbean (NYSE: RCL), its closest competitor. We recently noted also that Goldman Sachs had raised their rating on Royal Caribbean to its Conviction Buy List.
Jon C. Ogg
March 19, 2008
Today we’ll see earnings out of Borders Group, Inc. (NYSE: BGP). The estimates from First Call are $1.42 EPS on $1.34 billion in revenues. Next quarter estimates are -$0.40 EPS on $759.44 million in revenues. Estimates for fiscal Jan-2009 are $0.54 EPS on $3.78 billion in revenues. Analysts have an average price target north of $12.00. Borders is trading up over 5% ahead of earnings at $7.35 and its 52-week trading range is $6.90 to $24.15.
Thursday we’ll see earnings out of Barnes & Noble, Inc. (NYSE: BKS). The estimates from First Call are $1.71 EPS on $1.85 billion in revenues. Next quarter estimates are -$0.02 EPS on $1.18 billion in revenues. Estimates for fiscal Jan-2009 are $1.77 EPS on $5.55 billion in revenues. Analysts have an average price target of $35.00. Barnes & Noble shares are down over 3% at $28.25 today and the 52-week trading range is $25.01 to $43.80.
Whatever the reports are, both stocks are much closer to lows than highs. Book selling, magazines, and book accessories are all very economically sensitive. Plus those used book stores are just too much of a steal to discount and and Amazon.com (NASDAQ: AMZN) is just extremely convenient.
Jon C. Ogg
March 19, 2008
Private equity firms and hedge funds often make what seem to rather odd investments. But the one thing you can count on is that they both want to make money, even if it is in an odd transaction.
It appears that Michael Jackson has worked out a confidential agreement with Fortress Investment Group LLC (NYSE: FIG) allowing him to retain ownership of the Neverland estate, despite having been in default and owing millions on the estate that was soon to be up for auction. Here is the full AP article located on AOL, and it's the same article located in many media sites.
If you will go back a few years, there was an issue of the Michael Jackson music catalog loan. This loan involved a triangle with Sony Music, part of Sony Corp. (NYSE: SNE), and Bank of America (NYSE: BAC), but that was ultimately sold to none other than Fortress.
Sometimes the lighter side of Wall Street is more interesting than the day to day business news. At least this doesn't involve Eliot Spitzer.
Jon C. Ogg
March 14, 2008
Zumiez Inc. (NASDAQ: ZUMZ) saw shares rocket in after-hours trading after the company posted earnings. The apparel and equipment retailer for young adults in extreme sports )snowboarding etc.) posted earnings of $0.42 EPS on $126.6 million in revenues, while First Call estimates were $0.38 and $126.1 million.
It has also predicted that its 2008 profits would see $0.90 to $0.93 EPS, while First Call has estimates at $0.92; it also see a low-single digit same store sales gain. 2007 came in at $0.86 EPS on same store sales gains of 9.2%.
Zumiez didn't try to hide recent woes as it did address near-term environment as challenging. But the hope here is that since shares have fallen by more than two-thirds from high to low is that even a maturing Zumiez with less than 10% EPS growth and a low-single d-git same store sales growth represents value here.
At $0.86 EPS for 2007, it now has a trailing P/E ratio of 16.4 based on the close of $14.10. Its forward P/E ratio at the mid-point of guidance would be 15.4 based on that $14.10 close, but with shares up at $16.40 after the close its forward P/E ratio at the mid-point of guidance would be 17.9. That isn't grossly expensive and it isn't grossly cheap.
The "cheap" aspect is that this one can show incredible outperformance when it does beat, and Wall Street may be giving the company the benefit of the doubt and hoping for very conservative guidance being the case. The other energizer is the short interest as this had 7.45 million shares in the short interest, which is around 40% of the free float and almost 12-days to cover.
All in all, it's probably a safe bet that the worst has been seen so long as it doesn't disappoint ahead. Just don't go out on a limb looking for the old growth days and the old performance in the near-term.
Jon C. Ogg
March 13, 2008
TiVo Inc. (NASDAQ: TIVO) has reached an agreement with Google (NASDAQ: GOOG) to bring videos from YouTube to the television set. It will offer access to videos stored on YouTube directly to televisions that have a TiVo digital video recorder. The service will be available later this year to broadband subscribers that have TiVo Series3 DVRs,
including the new TiVo HD. TiVo users will now be able to search, browse and watch YouTube videos directly on television.
TiVo shares rose sharply with the market yesterday and shares are indicated up about 2% in pre-market trading this morning. Unfortunately, there are no financial terms disclosed for just what TiVo will get out of this and that makes it hard to get overly excited about this deal even if it would have been a huge score before.
Jon C. Ogg
March 12, 2008
On tonight's MAD MONEY on CNBC, Jim Cramer hosted World Wrestling Entertainment Inc. (NYSE: WWE) CEO Linda McMahon. This is one that Cramer touted before, and it doesn't look like much has changed there.
Linda McMahon noted that the company has not over-penetrated markets as not all events are sold out, and also noted the media properties it has. She also noted that Pay-per-view was a growth mechanism. As far as dividend are concerned, Cramer noted the high yield and increased dividends. The common holders get a $0.36 dividend quarterly, while the McMahon family dividend stayed at $0.24.
We looked, and that yield is 8%. In fact, its at the top of the 52-week trading range of $13.35 to $18.60. Shares closed up almost 4% today at $18.16, and shares were at $18.50 on last look in after-hours trading.
Jon C. Ogg
March 11, 2008
A small company called Access Integrated Technologies, Inc. (NASDAQ: AIXD) made an announcement this morning that it received commitments from four major movie studios to provide movies to up to 10,000 digital cinemas in the U.S. and in Canada that will be in conformance with the DCI specifications. The four studios are as follows:
This will take three years to complete, but the studios have agreed to pay virtual print fees for a limited time (it does not only a limited time) for movies projected on its systems. This will help in the commitment for 3-D delivery on select features, and we'd note that Dreamworks (NYSE: DWA) just signaled this morning that the animation studio would be releasing a 3-D film that has been under works called "Monsters vs. Aliens" in 3-D next year.
Access Integrated Technologies is seeing shares up more than 25% to $3.21 today and its market cap is a mere $84 million after this pop. Its 52-week trading range is $2.05 to $9.68. We may be looking farther into the financial terms there for our weekly "Stocks Under $10" letter, so stay tuned on this one. This would be up far more than this amount of the company didn't have this one listed as for "a limited time only."
Jon C. Ogg
March 11, 2008
IAC/InteractiveCorp (NASDAQ: IACI) has posted headline EPS $0.46, while First Call had estimates at $0.55. Total revenues were brought in at $1.86 Billion, versus a $1.83 Billion estimate. We would note that there appears to be gains and losses in the number.
This sure sounds like the company is saying it will proceed with its original split-up plans rather than try to appease John Malone. We have this one under review for our Special Situation subscriber letter. Barry Diller, CEO:
Diller outlined the bad news areas as lending, catalog, EPI discounts. On the good side, Diller noted HSN turnaround, record Ticketmaster volume, increased queries rm distributed toolbars, Ask.com, Interval, and Match.
On a separate basis, IAC noted that it has repurchased 6 million shares of common stock at $24.25 per share after this last quarter on January 10, 2008.
The market is not seeming to care about the items in the numbers as shares are indicated down over 6% on thin volume at $22.97. If that holds this will be a new 52-week low as the 52-week trading range is $23.30 to $40.99.
Jon C. Ogg
February 6, 2008
THQ inc. (NASDAQ: THQI) just posted earnings that it called in-line with previous guidance. The video game maker just posted $0.24 non-GAAP EPS on $509.6 million in revenues. First Call had estimates at $0.33 EPS on revenues of almost $503.3 million. The results today include already-noted charges of approximately $27 million in non-cash charges related to canceling certain projects and approximately $20 million in accelerated amortization expense.
The company is also guiding to -$0.06 EPS on a non-GAAP basis on sales of approximately $200 million. First Call has Next quarter estimates at $0.01 EPS on $211.4 million.
The company already killed its stock in January when its business charges also gave a look into lower guidance than many bulls were hoping for. Video games might not be entirely recession-proof, but the tapering off of the results versus expectations was something that traders were hoping was farther off than it is proving to be.
Shares closed down some 0.5% a $19.50 today, and shares are down almost 3% to $18.95 in after-hours trading. The 52-week trading range is $16.36 to $36.76.
Jon C. Ogg
February 5, 2008
The Walt Disney Company (NYSE:DIS) has posted earnings of $0.63 EPS, although excluding gains its EPS increased 29% to $0.63 for the quarter. It also posted $10.452 Billion in quarterly revenues. First Call had estimates at $0.52 EPS and $10.04 Billion in revenues.
Mickey Mouse and Hannah Montana also bought a more than a lot of Disney stock. During the first quarter of fiscal 2008, it repurchased some 31 million shares for $1.0 billion.
Disney shares closed down 2.7% at $30.07 in regular trading, yet shares are up over 4% to $31.35. Its 52-week trading range is $26.30 to $36.79.
Eiger just got signed to a new contract recently. It looks like he deserves whatever they are paying him.
Jon C. Ogg
February 5, 2008
On Wednesday morning, we’ll get to see earnings out of IAC/InterActiveCorp (NASDAQ: IACI). Frankly, this one has more questions than answers today. We do not know if Barry Diller is going to be able to focus on results in the Q&A or if he is going to be discussing the Malone-Diller war as Liberty Media (NASDAQ: LINTA) CEO Malone has Barry Diller under fire. It's amazing what a difference a year can make, because he was listed as one of our own "most entrenched CEO's" at the time and his fate is currently more than uncertain.
The estimates from First Call for the online and off-line media company are $0.55 EPS on $1.83 billion in revenues. Estimates for next quarter are $0.36 EPS an $1.57 Billion in revenues and estimates for fiscal 2008 are $1.80 EPS on $6.82 billion in revenues.
Analysts have an average price target north of $33.00. We are not really relying on options as a predicting tool because of the developments in the infighting that has come up and because of the pending break-up of the company. If we were looking at options as a tool today with static prices, we say options traders were expecting a price move of up to $1.00 to $1.25 in either direction.
This stock is up from its recent lows of $23.30 in January, but we'd take note that until this last bounce it has looked like one rolling low after another fake-out recovery. The current prices are important as the 50-day moving average is $26.31; its 200-day moving average is $30.03. Keep an eye on those as these numbers will likely change slightly by Wednesday.
Shares were just downgraded to Hold at Stifel Nicolaus on Monday morning over the current fate being questioned. We actually have IAC/Interactive up for formal review right now for our own Special Situation letter, and once we have the revenue figures out of each unit we'll be making a formal report for subscribers on this.
IAC/InterActiveCorp’s 52-week trading range is $23.30 to $40.99.
Jon C. Ogg
February 4, 2008
On Tuesday, we’ll get to see earnings out of Walt Disney Co. (NYSE:DIS). The estimates from First Call for the entertainment giant are $0.52 EPS on $10.04 billion in revenues. Estimates for fiscal September 2008 are $2.13 EPS on $37.04 billion in revenues.
Analysts have an average price target north of $38. The chart on this one has been rather ugly with only the last two weeks being a period of relief. Shares are currently under the 50-day moving average of $31.26 and well under the 200-day moving average of $33.24. If Monday's trading prices are any indicator and were left static, it appears that options traders would be pricing in a move of up to $0.50 to $0.55 in either direction.
We have even made a hint at Disney being nearly recession proof, although recession-resistant is probably more appropriate. We still wonder if Disney is putting its Hannah Montana brand at risk over the Wal-Mart outlet sales, although maybe that means it's already peaked if you can find idiot parents willing to spend hundreds of dollars for one ticket for their kid to see a concert. Despite some recalled toys from Chinese
