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April 2017

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General Motors Company (GM) and Ford Motor Company (F) A Good Buying Opportunity; Barron’s

General Motors Company (NYSE:GM) and Ford Motor Company (NYSE:F) two of the largest American automakers have good prospects going forward, investment firm Barron’s has claimed in a recent bullish note for the two stocks.

GM stock is down nearly 11% this year so far, while Ford Motor’s shares are down almost 9% over the same period. The S&P 500 index – representing the broader market – has so far trickled up 0.8% this year.

On Friday alone, GM shares were trading $3 under the company’s initial public offering price of $33 in November 2010. Ford’s stock, which closed at $12.94 on Friday, has returned almost nothing to investors in three years.

Barron’s notes investors are drawn more towards analysts’ expectations of a soon-to-come dip in monthly auto sales following from what these analysts have dubbed as the top of the US auto industry. Backing those claims are the excess sub-prime auto loans in the industry which these analysts believe could short circuit the auto sales momentum – much like the fate of the housing sector back in 2007 when the financial crisis struck.

Still Barron’s believes both these stocks promise at least 25% upside for patient and bold investors. The firm said investors and analysts are likely erroneously weighing negatives surrounding the auto industry more than the positives.

Beyond the healthy dividend yields that both GM and Ford offer (GM yields 4.9%, Ford yields 6.5%), the firm notes GM is trading at 5.6 times its one year expected earnings, while Ford trades at 6.6 times its projected 2016 earnings. In comparison, the broader market is trading at a much more costly valuation with the average one-year forward price multiple straddled at 17 times. This makes Ford and GM – both already great dividend stocks – cheaper than the market at large.

Barron’s says both Ford and GM are working with a leaner more adaptable cost structure and most of their plants are running three shifts – which reflect a strong desire to cash-in on the surging current auto demand levels in the country. While the sales volumes are indeed projected to dip, Ford and GM see the industry breakeven point well below current levels at around 10 million to 11 million vehicles. Some industry experts are in fact pitching auto sales to stabilize around the healthy 16 million to 17 million marks going forward – thanks in part to new auto demand expectations from the millennial generation.

The investment firm notes Europe has been an improved market place for GM while it’s already profitable now for Ford. China – the world’s largest auto market that has been weighed down recently from poor macro-economic conditions has also not stung GM and Ford as much as some analysts were expecting.

Barron’s says investors are likely over-judging the bad aspects of the two companies’ prospects, and that patient investors could be rewarded with consistent strong financial performance by both, Ford and GM.

There is speculation that Microsoft’s new console is going to sport next-generation hardware

At CES 2017 this week, Advanced Micro Devices, Inc. (NASDAQ:AMD) let the public get a taste of the next-generation CPU and GPU performance by setting up booths on the show floor. Being proud of its flourishing technological achievements, AMD had an ad for Microsoft Corporation’s (NASDAQ:MSFT) Project Scorpio console in their booth.

While the ad was nothing more than a sign of strength for AMD, gamers were quick to the speculation game. Since the booth was aimed to demonstrate AMD’s Ryzen and Vega, fans are pondering over the possible fact that Microsoft’s 6-teraflop monster could be powered by a combination of the two.

Project Scorpio, which is scheduled to arrive during the Holiday period this year, is Microsoft’s much touted 4K gaming console that wants to establish itself as the only native 4K gaming console. It is logical that Scorpio will be powered by AMD’s Vega GPU architecture, since Sony’s PS4 Pro already adopts some of Vega’s traits. Can it also use Ryzen as its CPU? This is what fans are excited about.

Xbox One is based on AMD’s Jaguar CPU architecture, and pairing it once again with a powerful GPU can hold the overall system performance. We have witnessed with PS4 Pro how even 4.2 Teraflop GPU is bogged down by the slow CPU, even though it features a higher clocked version than the standard PS4.

In likelihood, Scorpio will feature Jaguar once again albeit a heavily overclocked one. Not only will using Ryzen and Vega APU combo kick up the price, Microsoft would want to maintain compatibility with older games. Also, Ryzen and Vega APU release date is unconfirmed at the moment, expectations point to late 2017. Ryzen is a huge leap in performance from older generations; there will be a big disparity in CPU performance compared to the standard Xbox One if Scorpio is indeed based on it.

Despite some deceleration, Facebook is likely to maintain a healthy growth rate

Facebook Inc (NASDAQ:FB) is likely to experience some decline according to the latest report published by Deutsche Bank Alex Brown. The stock has maintained a strong momentum in terms of advertisements growth for the past few quarters and the recently ended quarter Q2 is no exception but the stock might have been a little too stationary in the past few months. The analyst, however, believes that these pauses are a part of strong growth projection and will likely work in favor of the stock rather than being harmful. Facebook is actively engaged in making the advertisement business more lucrative as it works towards better monetization, ad targeting, and different AI mechanisms to aid the advertisers.

The analyst sees a possible modest upside scenario to his estimates for the recently ended quarter. The analyst’s revenue estimate from Facebook’s advertisement business is $5.84 billion implying a growth of about 53% y/y inclusive of forex impact and about 56% y/y growth exclusive of forex. The recent changes at the company, reorganization of core assets, and changes in the ad presentation and formatting along with strong adoption of Dynamic Product Ads are likely to keep Facebook from going down the path of growth crisis in the near to mid-term. Assuming the scale of operations and size of Facebook’s business, some deceleration is expected but investors and stockholders should not be alarmed by such happenings.

The analyst’s current valuation surrounding the stock is about 34x 2017 GAAP EPS estimate and see the current trading levels as a buying opportunity for the investors. According to Reuters, the analyst recommendations for Facebook consists of 22 Buy, 21 Outperform, 3 Hold and 1 Underperform with a mean rating of about 1.64 suggesting a positive trend. The stock now trades at a value of $117.93 in the pre-market and has been relatively flat.

The online retailer has introduced new bundles for its Dot device, offering a Bose speaker bundle at cheaper rates

Amazon.com, Inc. (NASDAQ:AMZN) has rolled out with a new bundle for its Echo Dot device. The online retailer’s foray in to smart-speakers’ space with the launch of the Amazon Echo has helped it diversify its line of speakers and further bolster the trend of controlling smart-home appliances and third-party services with voice-commands.

The Echo Dot’s roll out occurred in parallel with the debut of Amazon’s other smart-speaker, Amazon Tap. Both the devices have been inspired by the company’s Echo speaker, which launched in 2014 and enabled users to perform a range of activities with the help of its virtual assistant, Alexa.

Now, Alexa’s popularity has proven to be a vital asset for Amazon’s growth in the competitive market of smart-devices. Whilst the Tap device is relatively smaller in size than the Echo, the company has made sure to integrate complex tasks within the hand-sized speaker to ensure that users can make the best of it while on the go.

Such measures have helped Amazon create a whole new “pillar” for its services. With the ability to control smart-thermostats, lights, smart-locks, and more, the concept of smart-homes is on the rise with more tech giants such as Google working on its own platform; Google Home.

With threats rising, it is evident that Amazon aims to ramp up on the existing capabilities of its speakers. Therefore, USA Today reports that the retail giant has once again rolled out with a deal for its Dot speaker, which allows users to purchase Alexa with a Bose speaker package.

These potential deals include:

Amazon Echo Dot (2nd Gen.) Black ($49.99)

Amazon Echo Dot (2nd Gen.) White ($49.99)

Echo Dot (2nd Gen.) + Bose SoundLink Mini II, Carbon ($213.99, SAVE $15)

Echo Dot (2nd Gen.) + Bose SoundLink Mini II, Pearl ($213.99, SAVE $35.99)

Echo Dot (2nd Gen.) + ecobee3 Smart Thermostat ($249, SAVE $49.99)

Echo Dot (2nd Gen.) + TP-Link Smart Plug ($69.99, SAVE $9.95)

Want more control over your Huawei smartwatch? Here’s how you can install custom ROMs

Released last year, the Huawei watch is still considered one of the best Android Wear smartwatches available right now. The device features a premium design that stands a class above the rest and build quality is to match. One of the main advantages of Android’s open nature is that users can customize their devices to their linking thanks to custom ROMs and mods installed via custom recoveries. Android wear is no different from this since you can do all this on the Huawei Watch as well. Today, we’re going to show you how to unlock the Huawei Watch’s bootloader and install TWRP recovery so that you can flash custom ROMs and ZIPs. 

What You Need 

·         A Huawei Watch charged to at least 70 percent. 

·         Android ADB Drivers. Download here. 

·         Minimal ADB and Fastboot. Download here. 

·         TWRP Touch Recovery. Download here. 

How to Unlock Bootloader and Install TWRP Recovery 

Step 1: First of all, you need to enable USB debugging on your smartwatch. Navigate to About and then tap on Build Number ten times to enable Developer Option. Go to Developer Options and enable USB Debugging and Mock locations. 

Step 2: Download and install Minimal ADB along with the ADB drivers and then connect your Huawei Watch to the computer. Launch Minimal ADB and Fastboot. 

Step 3: Once the drivers have successfully been installed, type in the command “adb devices” and execute it. If a device is returned, it means the connection has been successful. 

Step 4: Execute “adb reboot bootloader” to boot the device into fastboot mode. The watch will reboot to a black and white screen. 

Step 5: Now that your device is in fastboot mode, type and execute “fastboot oem unlock” to unlock the bootloader from the Huawei Watch. Confirm the prompt on the device. After the unlock, execute “fastboot reboot” to reboot the device into normal mode. Be sure to “Forget” the watch in the Android Wear app and then “Re-Pair” it. 

Installing TWRP Recovery 

Step 6: Reboot the device into fastboot mode by executing “adb reboot bootloader” in Minimal ADB. 

Step 7: Copy the recovery IMG file to Minimal ADB and Fastboot’s install location. Then, type in the following command to flash the recovery: fastboot flash recovery twrp-f2fs-3.0.2-sturgeon.img 

Step 8: Once that’s done, execute “fastboot reboot” to reboot your device.  

And that’s it. Your device will now have TWRP recovery which can be used to install Custom ROMS. If you want to try it out, here’s a custom ROM for the Huawei Watch: Negalite Huawei-ROM NX .

Visa and MasterCard have an upper hand in the case due to their market dominance

Home Depot takes visa and MasterCard to the federal court as it files an anti-trust lawsuit. The do-it-yourself retailer claims that both the payment processors look to stop the adoption of chip-and-PIN transaction on credit cards. Visa and MasterCard stand on their decision and the case is still unresolved.

The retailer argues that the chip-and-signature method is less secure for retailers and customers as compared to the chip-and-PIN method. It also claims that Visa and MasterCard choose the less-secure signature method because the two networks are able to charge higher on merchant fees compared to the PIN method. According to the US Federal Reserve data, even the debit transactions with the signature method costs twice as much to merchants and retailers, compared to the PIN transactions. If we imagine billions of transactions everyday through MasterCard and Visa, how much money difference there is between the two methods?

Home Depot speaker said in the lawsuit, “Visa and MasterCard know perfectly well that a signature alone, without the additional step of requiring a PIN, provides virtually no protection against many types of payment card fraud.”

While PIN transactions are more secured, they are less profitable for the payment networks. There is no surprise as to how much market dominance Visa and MasterCard share over the years. Both the companies seem in a strong position in the market. The lawsuit also states that both networks are more concerned over protecting their own profits and market dominance, rather than providing secure payment process for increasing number of US consumer spending.

Home Depot’s lawsuit against Visa and MasterCard is quite similar to Walmart’s lawsuit on Visa. Walmart stated that Visa prevented the retailer from considering the PIN requirements on all debit transactions, which resulted in Walmart paying the signature-method fee.

On the other side of the argument, both payment networks suggested that using PIN on credit cards could cause confusion amongst consumers. Moreover, Visa said that the payment processor does not take a position against the PIN stance, but it is a choice of banks and merchants. This case will also result in Home Depot paying the higher merchant fee. If one of the world’s biggest retailer couldn’t contest, we don’t see much hope for do-it-yourself retailer.

The Country Caller uncovers the long awaited whisper numbers prior to earnings announcements of both the retailers

The two companies, AutoZone, Inc. (NYSE:AZO) and Finish Line Inc. (NASDAQ:FINL), have made arrangements to release their quarterly financials. AutoZone would release its financial results for the fourth quarter of fiscal year 2016, prior to the opening bell on Thursday, September 22. It has exhibited missed trends in the past; however, it disappointed its investors by missing out on the consensus estimates both on the top and bottom line. Compared to this, Finish Line would uncover its results for 2QFY17 in the pre-market hours on Friday, September 23. The retailer has maintained positive beat trends recently, including top and bottom line beat on Street expectations in the last quarter. Following the earnings call announcements, the analysts at the Street are looking forward to both beating their earnings predictions for the season.

AutoZone, Inc.

According to the Street analysts, automotive parts seller has been projected to announce non-GAAP earnings per share of $14.3 for the fourth quarter. On the other hand, earningswhispers.com has predicted it publish diluted EPS of $14.38, about eight cents above the Street projection. If $14.3 EPS is announced and consensus estimates are met, the aftermarket automotive accessories marketer would realize earnings growth of 32.78% on sequential basis as it announced $10.77 in EPS for 3QFY16. It would also observe earnings increase of 12.16% YoY as it gave out earnings amounting to $12.75 in 4QFY15.

Similarly, the consensus has produced a revenue estimate for the $21.9 billion business amounting to $3.44 billion. Likewise, estimize.com has also given the same estimate for the net sales of the company for the upcoming results announcements. Therefore, if analysts of both are made happy, the revenues would grow sequentially by roughly 32.15% as it announced $2.6 billion in revenues in the last quarter. The Tennessee-based enterprise would observe an annual revenue growth of 4.12% as it published $3.3 billion as last year’s revenues for the same quarter.

Finish Line

According to FactSet Fundamentals, the consensus estimates expect the retailer to announce diluted earnings of 53 cents for the season. In comparison to this, earningswhispers.com, poised on beating the Street on bottom line, has given its prediction of 55 cents for the non-GAAP earnings for the season. If 53 cents are produced in the earnings, the apparel and accessories seller would observe sequential diluted EPS growth of 130.43% as it announced 23 cents in non-GAAP EPS in the previous season. However, it would observe a decline in its earnings on annual basis by 7.02% as it reported an EPS of 57 cents in 2QFY16.

Moreover, the net sales have been predicted by the Street to be declared at $493.61 million. Compared to this, estimize.com expects the figure to be slightly above, with projected difference of approximately $1 million, at $494.21 million for the second quarter. If the Street predicted estimates are fulfilled, the revenues of the Indianapolis-based organization would grow sequentially by 8.84% as it reported $453.5 million in 1QFY17. The $1 billion business would also observe annual net sales growth of about 2.15% as it reported net sales amounting to $483.2 million in the second quarter of last year.

Alphabet plans to bring wireless speeds faster than any wired connection

Alphabet Inc.’s (GOOGL) Executive Chairman, Eric Schmidt, announced during the company’s annual stockholder meeting that Google is currently working on developing wireless connectivity speed as fast as wired connection. He further stated that Alphabet Inc.’s ambition could lead to developing wireless speeds that are even faster than wired connections and these ultra-high-speed Wi-Fi signals will be “wirelessly” beamed directly towards consumers’ houses. Here is The Country Caller’s take on the tech giant’s plans to introduce ultra-high-speeds connectivity.

Eric Schmidt stated that Google has big plans for its Google Fiber internet service. The company wants to provide its customers with connectivity speeds of up to one terabyte. The best part about the effort is that it wants to provide ultra-high-speed connectivity without laying a single cable around any house. This would not only be less costly for the masses but also significantly low for the provider because there will be no need to evacuate the premises to route wires and cables for the connection.

If Google wants to achieve its ambition, it should deploy a technology called millimeter wave technology that will allow more information to be transported as compared to the Wi-Fi technology currently used. This kind of technology is presently available only to the army and is very expensive, so Google will have to work a way out to commercialize the technology.

Although Google announced plans to introduce ultra-fast-connectivity on Tuesday, it has already started trials in areas of Kansas, which is the first location where it installed its Google Fiber. However, the company will not be able to present a fully functional demo of the technology until sometime next year.

If the giant succeeds in bringing wireless connectivity that will be faster than wired connections, then the way people use smartphones, tablets, laptops, etc. at home will change forever for the better. Consumers will have access to ultra-high-speed connectivity that will shatter downloading and uploading limitations. Internet users will also have to exponentially increase their cloud storage capabilities due to the extreme speed provided through these wireless connections. Internet connectivity looks set to enter a completely different level in future.

Amazon now enables Prime subscribers to access trending content without a cable plan

Amazon.com, Inc. (NASDAQ:AMZN) has added HBO and Cinemax to its Prime platform. The company hopes to provide users with an option to have on-demand access to trending content without a cable plan.

Since Amazon Prime operates as one of the retail giant’s major “pillars,” the company’s decision to expand upon its “Amazon Channels” offerings will work as a great way to lure in more subscribers. The retail giant launched its Amazon Channels division last year to help add cable channels for users. Now, the company’s Amazon Channels program already provides its user base with a range of other channels, including Showtime, PBS Kids, History Channel Vault, Starz, and many more.  

Through this, we believe that Amazon’s adamant efforts to constantly ramp up on its offered content for its user base is a great way to market the subscription service, which already offers a range of other perks as well. Apart from free two-day shipments, it is evident that the company’s decision to enable streaming to a wide library of TV shows and movies has been one of the main reasons for its growth.

Subsequently, there are high chances that the addition of HBO and Cinemax will help Prime to double upon its number of users. Furthermore, it may even secure content such as Game of Thrones for just an extra $15 a month.

According to Sofia Chang, Vice President of HBO’s digital distribution and home entertainment, “We share the goal of providing Amazon customers more ways to access all of the high-quality HBO and Cinemax programming they’ve been asking for.”

Considering that Amazon has been working excessively to bring its Prime platform to places such as Canada and India this year, we believe that the company’s Amazon Channels latest news works as a great marketing boost. Especially after the retail giant managed to gain access to the latest “Grand Tour” series, it is evident that Amazon is playing with Prime, knowing exactly what customers want.

HTC will be designing the next generation Google Nexus devices that are set to release by end of 2016

It has already been confirmed that Alphabet Inc. (NASDAQ:GOOGL) will be collaborating with US based HTC for its next generation Google Nexus devices, codenamed Google Nexus Marlin and Google Nexus Sailfish. The Google Nexus Marlin will be the successor of the powerful Nexus 6P and the Google Nexus Sailfish will be the successor to the economical Nexus 5X.The current generation of Google Nexus devices earned a lot of praise and positive reviews due to their efficient performance. It will be interesting to see how Google builds on from the success of their current generation Nexus devices with the release of the Nexus Marin and Nexus Sailfish.  HTC is expected to launch both Google Nexus devices by the end of 2016. Here is The Country Caller’s take on Google’s next generation Nexus devices.

Speaking of specifications, it is no secret that the Nexus Marlin will be significantly more powerful than the budget friendly Nexus Sailfish. Popular rumors are speculating that the Nexus Marlin will come in an all-metallic build while the Nexus Sailfish will inherit the plastic build of the Nexus 5X. Interestingly, the Nexus Marlin and Nexus Sailfish will feature smaller display screens than their respective predecessor models. The Nexus Marlin is expected to sport a 5.5-inch display screen while the Nexus Sailfish is expected to sport a 5-inch display screen. Both next-gen Nexus devices will definitely come pre-installed with Google’s latest OS Android Nougat.

Since virtual reality is set to take over the smartphone industry, the next generation Nexus devices will be compatible with the upcoming Google Daydream headset. Both devices are rumored to run on a Qualcomm Snapdragon 821 chipset which offers slightly higher clock speed than the chipset on the current generation of Nexus devices. Also, both Nexus Marlin and Nexus Sailfish are expected to feature similar cameras to their predecessor models. Both smartphones should offer 4GB worth of RAM but the Nexus Marlin will offer 128GB of internal memory while the Nexus Sailfish will offer 32GB of internal memory. The Nexus Marlin and Nexus Sailfish are rumored to feature 3450mAh and 2770mAh battery life, respectively.

Google launched the current generation of its Nexus devices in the month of September, so the tech giant could follow a similar path and launch its upcoming Nexus smartphones. Also, it is expected that Google’s Android Nougat software will be releasing by September which further strengthens the possibility of the next generation Nexus devices releasing in the same month. It is also expected that Google will look to launch its Daydream virtual reality headset along with its next generation Nexus devices.