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July 2017

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The Country Caller throws light on both stocks from a technical analysis perspective

Amazon.com Inc. (NASDAQ:AMZN) and Alibaba Group Holding Ltd (NYSE:BABA) are two of the biggest names in e-commerce. Both the companies have recently been doing really well and have stayed in the limelight for investors. While the Bellevue based e-commerce retailer has been the charm of Street houses after its second quarter earnings, its Chief Jeff Bezos has also taken the third spot in the world’s richest man ranking. The Country Caller has been actively pursuing on the hottest stock in current times.

Meanwhile, the Chinese e-commerce retailer has also been in the news lately. Considering its entry into newer avenues such as eSports, it is quite evident that Alibaba Group is up for something bigger in the future. We wait for the numbers due later this month, while we have continually discussed our bullish stance on the stock. Our views are complimented by those of renowned brokerages such as Morgan Stanley, who reckons a very bright future of the company. While positive catalysts exist for both of these rivals, The Country Caller throws light on both stocks from a technical analysis perspective.

Amazon.com Inc.’s stock currently appears to be in a neutral state, while we expect the bulls to take lead in a few more sessions. The 15-day RSI hints a Neutral scenario while the stochastic and oscillators also hint bull friendly conditions. The current bullish trend is yet to gain strength, however, the bulls are dominant.

Major price level for Amazon stock is $764.72, a break above which may lead to $768.86 and $776.85 levels, respectively. Major support resides at $756.73 level, if prices go below this level, then we may be eyeing $752.88 and $744.89 levels, respectively. We maintain our bullish stance on Amazon.com.

Alibaba Group Holdings stock seems to be approaching the oversold region, and we reckon it is a good time for fresh positions. The 14-day RSI currently hints bull friendly conditions, whereas the other indicators complement the notion. The bulls do not seem to have much momentum left with them.

Major price level for Alibaba stock is $84.46, a break about which will push to $85.11 and $86.54 levels, respectively. Major support resides at $83.03, if price plummets below this level then we may be eyeing $82.25 and $80.82 levels, respectively. Overall, we maintain a bullish stance on Alibaba Group Holdings.

Apple and Microsoft will launch the next-gen MacBook Pro and Surface Pro soon; The Country Caller reviews the two high-end systems

Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) have already launched two of the best available laptops in the market. The Microsoft Surface Pro 4 and the Apple MacBook Pro 2015 are exceptionally great devices which earned numerous positive reviews by coupling performance with efficiency. In order to keep ahead of the rest of the pack, both tech giants are already working on their respective next-generation devices. Apple is expected to launch its next-generation MacBook Pro and Microsoft is highly rumored to release the next-generation Surface Pro 5 by early 2017. Based on specifications, The Country Caller discusses which upcoming device will likely fare better.

In terms of design, the Surface Pro 5 is expected to have a very similar design to its predecessor, but the next-generation MacBook Pro is highly rumored to feature a host of design changes, including a new fingerprint scanner, Touch ID, improved keyboard, and a slimmer and lighter body. The Surface Pro 5 is also rumored to feature a charging dock for its Surface pen and will feature USB Type-C port for fast charging.

As for power, the latest rumors suggest that the next-generation Surface Pro will be powered by Intel’s latest Kaby Lake processor and the device will run on Windows 10 Redstone 2. The next generation MacBook Pro is expected to be powered by Intel Skylake processor and run on Apple’s latest MacOS revealed during the company’s Worldwide Developers Conference (WWDC) 2016.

Coming to display screen, the next-generation MacBook Pro is rumored to sport an OLED display screen with resolution of 2304 x 1440. The display of the upcoming MacBook Pro is rumored to support 5k video technology as well. The Surface Pro 5, in contrast, is expected to be released in two display screen resolutions, 4k and 2k.

Both the devices would come at different price points. The Surface Pro 5 is expected to be launched at retail prices ranging between $900-2,000, depending on the specifications of course. The next-generation MacBook Pro is expected to have a pricier base model than the Surface Pro 5, as its 13-inch model would retail for $1,099 and the 15-inch one would retail for $ 2,099.

The two systems are expected to offer top-notch specifications backed by high-performing operating systems, so there is no clear winner for us. At the end of the day, what you want out of a laptop will determine which upcoming device would suit you better. If you want more portability, then you should aim for the Surface Pro 5, but if you want pure functionality out of your laptop, then the MacBook Pro will be a safer bet.

Those users who didn’t opt to use the full 15GB would also experience the cut in free storage

Microsoft Corporation (NASDAQ:MSFT) has now started to reduce the free storage available on its cloud storage platform OneDrive from 15GB to 5GB, after the company announced the change in November last year and gave users the time to make suitable arrangements. These arrangements also included opting in to keep all of the 15GB storage on OneDrive and the 15GB camera roll storage, after user backlash to the announcement caused Microsoft to buckle under pressure and allow older users the full storage that they were used to. However, those that didn’t exercise that option will now have their free storage cut from 15GB to just 5GB- if it already hasn’t been cut, that is.

More than 75,000 votes were accumulated on a Microsoft blog post about the announcement, after which Microsoft group program manager, Douglas Pearce, apologized to the users for the inconvenience. Later, the company started sending out email notifications to users in April, warning them of the impending reduction in free OneDrive storage from 15GB to 5GB and discontinuation of the 15GB camera roll storage as well.

Microsoft gave users a deadline till January 31 earlier this year after the initial announcement in November last year, to opt out of the change. For users that didn’t choose to avail that option, their storage will now be reverted to 5GB and they’ll also lose the camera roll storage. Microsoft conducted the whole process in a proper, reasonable way and there should be no uproar or discontent if users start noticing the changes, especially after the alarm bells were also rung.

Intel Corporation and Baidu Inc jointly developing technologies for making autonomous cars safer from collisions, restoring customer confidence

Recently, Intel Corporation (NASDAQ:INTC) and Baidu Inc. (ADR) (NASDAQ:BIDU) have joined each other to build computing technologies for the new Autonomous vehicles. The news came in amid announcement of Intel’s autonomous driving dream at FY16 Intel Developer Conference held in San Francisco. The session further stated the business opportunities associated with this announcement as well as outlined the company’s technology assets and investments strategies.

In this conference, the California-based company commended its position of being able to deliver exceptional assets required for the self-driving vehicles. The company has an intelligent network and a powerful cloud base that would aid it in being successful. The announcement was made and supported by a group Intel executives who approved of the company’s data center and its machine learning solutions.

They further added that the $164.55 billion can bring 120 million vehicles with different degrees of automated solutions by FY30, translating the economic landscape to new levels. The economic waves associated with this release could help US economy to save $1.3 trillion by that period along with $507 billion increase in productivity as well as $488 billion reduction in accident costs. Also, the decreased congestion on the roads would increase productivity savings to $138 billion by FY30.

Moreover, the chipmakers partnership with the Chinese giant would help it in producing computing technologies and data center that are required for the self -driving cars. These outclass technologies would make the cars safer from collisions. It would also create an enhanced sense of security for the passengers.

The semiconductor maker has an end-to-end advantage that positions it uniquely to provide with all of the components that are required for autonomous driving. It would be able to deliver exceptional experiences through its communications and data center. The company further stated that it would use 5G prototype solutions, in partnership with other automotive and telecom leaders, to improve network communications alongside efficient data center that would allow deep machine learning algorithms to be fed in the car.

Furthermore, in its conference, Intel Corporation gave demos that showcased its advance technologies. It showed designs of its autonomous vehicle. The vehicle is expected to have 49 OEM software defined cockpit along with 33 tier one suppliers. The company would have more than 30 models on the road. For autonomous driving, it would use 19 OEM platforms, 59 ecosystem partners, and 9 tier one arrangements.

Following this announcement, the shares of the company were up 1.51% year-to-date through Thursday. Investors at FactSet Fundamentals are optimistic and have agreed on 18 Buy, two Overweight, 13 Hold, one Underweight, and two Sell ratings for Intel. They have given one year price target of $37.56, depicting a rise of 7.41% over the closing price of Thursday, August 18.

Another day, another iPhone 7 leak

Apple Inc. (NASDAQ:AAPL) is still a few months away from launching the next flagship iPhone in Fall this year, but the amount of rumors that we’ve been treated to in the last few weeks have barely left anything to imagination – or the official launch for that matter. A fresh leaked video clip of the iPhone 7 has now surfaced that apparently shows the next flagship iOS device’s front, back, and bottom. The clip is only six seconds long but some of the biggest rumored details about the iPhone 7’s exterior and design were confirmed in the video clip.

The redesigned antenna bands at the top and bottom and the larger rear camera lens are both spotted in the video clip. Also, more prominently we should mention with all the furor around it, the 3.5mm headphone jack is also nowhere to be seen on the iPhone 7 casing in the video. Instead, the dual-grilled stereo speakers take its place, further fueling the rumors that the iPhone 7 will feature lightning-powered or Bluetooth headphones.

The debate about whether the 3.5mm headphone jack should be included in the next iPhone is one that keeps on raging and hotting up with every passing day, but more and more evidence is coming to light that Apple could become the first major smartphone maker to remove the vintage component and once again, lead the rest of the industry to another innovation in the product. Some of the other rumors that have been floating around so far regarding iPhone 7 have indicated that a 3D-Touch Home button and possibly water-resistance, could both feature for the first time.

The analyst expects Boeing to post an in-line quarter

Boeing Co (NYSE:BA) is expected to announce its fourth quarterly earnings report for the fiscal year 2016 on January 25. Canaccord Genuity, a financial research firm, has bumped the price target on the company ahead of the call and has commented that its checks suggests that the company is going to be in-line with the consensus estimates. The analyst believes that the investor focus will be mostly on the company’s Free Cash Flow guidance for the year 2017.

Street expects Boeing to report revenue of $23.25 billion and EPS of $2.32. The airplane manufacturer already provided top and bottom guidance for the year 2017 when it made announcements regarding Boeing 777, but the FCF guidance was withheld and is expected to be announced during the earnings call. Apart from financials, the company is also expected to make some major announcements regarding 787.

Despite raising his price target on the company, the analyst doesn’t expect any positive surprises from the company as far as the earnings call is concerned and believes that the results would largely be in-line. There has been some movement in the company’s top management but the analyst expects its strategy to remain unchanged for the most part. The demand for wider body aircrafts has declined significantly during the past few quarters and the analyst believes that this does not bode well for the 787.

However, the downside risk remains limited due to the company’s positive FCF trajectory. Boeing is also expected to use some of its share repurchase authorization during the upcoming quarter which will support EPS and share price. Canaccord maintained Boeing at Hold and raised the price target to $150 from $145. The analyst ratings for the company are seven buy, seven outperform, nine hold, three underperform. The stock now trades at a price of $158.24 and has gained 0.36% since the open of the market.

Tesla’s upcoming competition suggests that their new battery cells are also the best with highest energy density

Last month, Tesla Motors Inc (NASDAQ:TSLA) CEO Elon Musk went on record saying that the new ’21-70’ battery cell, which has higher energy density than the 18-65 battery cell, is the world’s best and cheapest cell. While the claim appeared to the exaggerated at the time, now Tesla and Panasonic’s competition is making similar claims, according to an Electrek report.

After announcing to construct an EV factory in Arizona last week, Lucid Motors, previously known as Atieva, made Samsung SDI its battery cell provider for its all-electric sedan, which will someday compete with the Model S. Like Tesla and Faraday Future (FF), they plan to work on cylindrical lithium-ion battery cell which they claim as “breakthrough.”

In October, FF announced a deal with LG Chem and both the companies claimed that they are developing new battery cell which will have the highest energy density in EVs.

Lucid Motors and Samsung SDI described their new battery cell technology:

“Next-generation cylindrical cells that are able to exceed current performance benchmarks in areas such as energy density, power, calendar life and safety.”

Lucid Motors Battery Technology Director, Albert Liu, explained that the Korean battery maker combined its in-house chemistry expertise with massive real-world data sets” and modern battery models supplied by his company to make the cell, which can resist to fast-charging and is energy dense.

Lucid Motors CTO, Peter Rawlinson, the former Model S chief engineer, said that the breakthrough battery life showed by the new Samsung SDI cell will have “tangible benefits” to vehicle customers, particular those who will use it for ride-sharing purposes.

The new EV maker also claims that its cell will allow its upcoming all-electric sedan scheduled for launch in 2018 to have a range of 400 miles. Interestingly, Tesla, Lucid Motors, and FF are the only EV makers working on cylindrical cells, as opposed to prismatic or pouch cells used by other automakers for their EV ambition.

Advanced Micro Devices has hinted at some strong GPU performances during its show

Advanced Micro Devices, Inc. (NASDAQ:AMD) RX 480 holds a lot of promise. During the Computex 2016 press briefing today, AMD showed its commitment to bring high-end GPU performance to the mainstream market, and the RX 480 achieves that perfectly.

At just $199, it is the best value for money GPU you could get right now., whose performance will sit somewhere between a GeForce GTX 970 or GTX 980. This effectively makes VR more accessible to people with mainstream rigs.

Talking about how the $700 segment can be filled, Radeon Technology Group’s Head, Raja Koduri showed the performance of RX 480 in Crossfire. The demo presented on-stage was Ashes of the Singularity; two side by side screens running instances of the game, but on different GPUs. The first was NVIDIA Corporation’s (NASDAQ:NVDA) GTX 1080 and the second was RX 480 Crossfire. The performance results showed that the GeForce managed 58.7FPS, while the Radeon achieved 62.5FPS.

 

The highlight of the benchmark was to showcase that two RX 480 delivers at least the same level of performance than NVIDIA’s current high-end GPU, all the while costing under $500.

It does sound very impressive but there are some things to keep in mind here; Ashes of the Singularity has always performed better on Radeon GPUs. This is due to the fact that the game is built on DirectX 12 and utilizes Asynchronous Compute. However, as per NVIDIA’s claims, there is no Asynchronous Support in current GeForce drivers. All performance benchmarks between GPUs across DirectX 11 and DirectX 12 have shown crippling performance for GeForce GPUs, when the latter API is used. So, the performance we have at hand should be taken as inconclusive until NVIDIA releases proper drivers.

The discovery would not only prove to be lucrative to Exxon, but to other partners as well

Given the slight rally in oil & gas prices during second and third quarter of 2016, energy companies have resumed their exploration and production (E&P) activities. With West Texas Intermediate (WTI) currently trading 1.79% up at $46.51 per barrel and Brent crude trading 1.9% up at $47.74 per barrel, Exxon Mobil Corporation (NYSE:XOM) has paced up the development of its Liza discovery.

The Liza gas block, situated on the 6.6 million-acre Stabroek block is part of the company’s development program. Other partners for the Stabroek include Esso Exploration & Production Guyana Ltd. holding 45% stake in the well, CNOOC Nexen Petroleum Guyana Ltd having 25% share of interest while Hess Guyana Exploration Ltd.  having 30% stake in the Guyanese well. Both partners have described the Liza well as a “world class discovery.”

As per estimates by the aforementioned companies, the Guyanese well may yield up to 800 million to 1.4 billion barrels of oil equivalent; quantity twice in number compared to original expectations. In addition, Wells Fargo estimated that the companies could easily reach breakeven on developing Liza well at less than $40 per barrel.

Nexen and Hess Corporation have informed Minister of Natural Resources, Raphael Trotman, regarding the commercial quantities of the Liza well. In a press report, Mr. Trotman stated: “This is profound and watershed moment in the development of our country.”

Not only for Exxon, but the development of the latest discovery would also be beneficial for Hess Corporation. Standing at the high end of the estimate, the company’s share of interest equals to roughly 420 million barrels. The energy giant mentioned that more exploratory drilling for the block is underway.

An exit by Mr. Icahn could essentially see the stock make a sustained move downwards and bleed value over time as investors are on the fence once again when it comes to AAPL

Billionaire investor Carl Icahn seems to finally have given up on Apple Inc. (NASDAQ:AAPL) stock as the activist investor put out a notice stating that he was exiting his position in the company, a massive 1% of the company’s total outstanding stock, over his growing concerns regarding the tech giant’s relationship with China’s government in addition to slowing growth in the region.

Icahn’s departure from the AAPL ship could essentially mean that the Cupertino-based tech giant may have to deal with significant downward pressure when it trades in a market already digesting the news that Apple is no longer a growth stock. Given that Apple is already struggling to exhibit positive growth numbers YoY and its biggest product, the Apple iPhone, has seen its growth potential in the coming months all but written off, the exit should not come as a massive surprise. That being said, it needs to be said that Mr. Icahn’s sudden move after as many as 3 years of calling the stock “undervalued” and a “no-brainer”. The move comes in after China made it impossible for Apple to make direct sales in the country via its iTunes movies and iBooks stores, something that caps its potential a services provider and digital content distributor and raises concerns that Apple could find it very hard to even continue selling hardware in the region should the Chinese government act in that direction.

While Carl Icahn insists that the company is still cheap based on a multiples basis, he does not want to hold a position in the company while there is a shadow of doubt surrounding its position and future in China. According to him, he has made $2 billion on the position he had on AAPL since he made his holdings public about 3 years ago. Apple has moved down more than 10% during the same period thanks to weak guidance in addition to downwards revisions by various sell-side analysts such as KGI Securities’ Kuo amongst others.

The issue is not Apple’s potential, but rather public perception while the “shadow” of China is omnipresent in the foreseeable future as an unsure factor even as it is the largest market for Apple in the world and growth in other key markets such as India is not expected to cover any major downsides in China. Irrespective of any long term growth potential for AAPL, should it emerge, Mr. Icahn’s exit and various perceived exits in the near future could see Apple move downwards and reach a new 52 week low in the days to come. AAPL stock is currently trading at $93.55, 1.36% lower after a sustained downward push that is threatening to push the company’s current P/E ratio to as low as 10 or lower should this continue in this direction.