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January 2018

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The firm’s analyst believes that Micron has lower than expected inventories

Micron Technology, Inc. (NASDAQ:MU) has received a price target raise at the hands of analyst Mike Burton of Brean Capital, who believes that the stock is performing very nicely and there is certainly a lot of upside potential. The analyst performed some channel checks and believes that the current level of inventories is far lower than the expectations.

According to Mr. Burton this serves as a positive surprise and the company will be able to ramp the production ahead of the holiday season. Micron will announce its quarterly earnings report on December 21.

Mr. Burton also believes that the company is very likely to produce strong results. The guidance numbers provided by the company will once again prove to be conservative as they have been for the past few quarters.

The industry as a whole is in a very strong position, owing to sustained high level of demand in the PC market and other related areas. Micron has a significant upside potential both in terms of revenue and earnings for the next quarter.

Micron pre-announced the quarterly results for the quarter a week ago and they were ahead of consensus on almost all ends. The analyst has opined that the strength in DRAM pricing is likely to be sustained in near future and will support positive ASP trends for the company. The analyst personally visited the Asian markets and believes that DRAM and NAND trends are expected to accelerate during the next year. 

Brean Capital reaffirmed its buy rating and raised the price target to $25 from $23. The analysts’ opinions for the company include eight buy, ten outperform, four hold and four underperform ratings. The stock currently trades at a price of $18.51.

It’s not over yet rooters!

Around four or five weeks back, Niantic officially announced that any user playing Pokemon GO on a rooted device will no longer be allowed to play the game as they tend to use it as an advantage and cheat. However, this didn’t matter as these players soon figured out that by downgrading; they can get past the root barrier and play the game. But with the release of the game’s most recent 0.39.0 update, everything changes, as now it has become impossible for players with rooted devices to play the game.

Before the new update, players were given the option to choose whether they want to update their game or not. However, with the new update, that has been changed. Now, in order to play the game, you have to have the game’s latest update installed, which means no more downgrades.

This is bad news for players with rooted devices as they don’t have any other choice but to unroot their phones. But then again, maybe there is a way. Niantic has a built-in system in the game which detects if your device is rooted or not and then grants the player access to the game. So all you have to do is trick this system into thinking that your device is not rooted.

Do to that, all you have to do is follow our guide on how to hide your root, here. If you follow the steps correctly, at the end of it all, you will be able to run the game with the most recent update installed.

However, those of you who don’t want to risk getting their devices bricked and still want to play the game, there is only one option left, unroot your phone to its original state. But then again, where’s the fun in that?

Oracle Corporation reiterated as Buy by UBS

Analyst Brent Thill at UBS maintained Buy rating for Oracle Corporation (NYSE:ORCL), after the company announced a shift in its strategy and reversed its strategic viewpoint regarding LaaS and PaaS. It now clearly appears to aim towards Amazon’s AWS (Amazon Web Service) dominance.

The analyst noted that its much awaited and expanded slate of a range of Cloud Infra Offerings appear to compete with its margin-rich, entrenched and on-premise portfolio. However, this appears to be the right shift in strategy for the company to protect its core, despite it seems to be very much painful at outset.

The UBS analyst mentioned some of the positives regarding the stock, which included its ability to deliver on the front of a truly hybrid vision for future. It also has robustness on the front of core tech. Also, other positives included deepening Cloud Infra engineering, the hindsight-driven advantage related to innovation etc.

The analyst also questioned if Oracle Corporation could navigate this phase of transition in a profitable way or not, considering the structural lower margin and price competitive dynamics of the market, and Oracle’s small and current scale (Laas/Paas run rate and ARR bookings of around $400 million as compared to Amazon Web Services around $12 billion run rate revenues). The Capital Expenditure (CAPEX) leaders of hyperscale players, such as Google, Microsoft, Amazon Web Services, have already attained $28 billion, $20 billion and $11 billion respectively in the past three years as compared to Oracle’s $3 billion.

The analyst has made no changes to the price target for the stock of $44.00. The stock performance for the year has been substantial, i.e. 7.29%, which reflects the investors’ confidence in the stock. However, it has recently started to decline and has resulted in a drop of 3.91% in past one month of trading.

Deutsche Bank believes that the second half of the current year will be fruitful for dermatology segment

Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) is once again a part of the coverage list at Deutsche Bank AG (USA)(NYSE:DB), as analyst Gregg Gilbert believes that there are a lot of positive catalysts on the horizon for dermatology segment. Valeant was dropped by Deutsche Bank following an elongated period of weakness that engulfed the stock, following Philidor and accounting controversies. The analyst believes that Valeant’s dermatology segment looks set to earn some lost ground under the leadership of new CEO, Joseph Papa.

Mr. Gilbert commented that Valeant is now seen in a new light at Deutsche Bank and all the estimates are as per the new preliminary model, which is in accordance with the recent reporting changes that are announced by Valeant and will be enforced from Q3 onwards.

The analyst expects other major changes that include material divestments, changes in debt structure and other accounting policies. Mr. Gilbert believes that the newly hired CFO will aim to enforce “meet and beat” culture as far as the guidance is concerned and therefore expects Valeant to remain slightly conservative.

Despite resumption, Mr. Gilbert maintained a conservative stance and believes that further clarity is required to get more positive on Valeant. He pointed out that his preliminary model might be lacking in the sense that it does not account for the upcoming product launches and ignored the flow of product pipelines for the most part. Regarding Xifaxan, the analyst remains skeptical and believes that there is a significant amount of risk associated with the drug.

Deutsche Bank has given Valeant a hold rating on resumption, with a price target of $30 as per preliminary model. The analyst opinion for the stock consists of three buy, two outperform, 12 hold and four underperform ratings. The stock currently trades at a price of $26.67 and has lost 1.59% during the session.

Tesla, Apple, and Alphabet outshine in BCG’s Most Innovative Companies of 2016 survey

Boston Consulting Group (BCG), a Boston-based management consultancy firm, published a report on the world’s most innovative companies each year. Today, it published the 2016 survey which was dominated by the American companies, with 68% of the companies in the US.

While Apple Inc. (NASDAQ:AAPL), Google Inc., Tesla Motors Inc. (NASDAQ:TSLA), and Microsoft retained the top four spots in the said order, Amazon.com, Inc. (NASDAQ:AMZN) came at the fifth position, followed by Netflix, Inc. (NFLX) which came all the way from the 21st position last year. Conservatively, Samsung Group and Toyota slid two spot each to number seven and eighth, respectively. Here’s the complete list of BCG’s Most Innovative Companies for 2016:

Apart from Netflix, the biggest jumps were seen by all the American companies: Facebook (+19), Dupont (+19), Pfizer (+18), Nike (+15), and JPMorgan (+14). Conversely, the biggest dips include Siemens (-30), Marriott International (-22), Walt Disney (-18), and Gilead Sciences (-15).

Some of the big names like Biogen, Mastercard, Tata Motors, Tencent, Visa, Volkswagen, and Yahoo! Were replaced by new comers such as Airbnb, Elon Musk’s SpaceX, General Motors, Honda, Procter & Gamble, Xiaomi, Uber, and Under Armour.

34 of 50 companies were from the US, 10 from Europe, and six from Asia. The firm surveyed over 1,500 senior innovative leaders across various industries and companies. Andrew Taylor, BCG Managing Director and report co-author, said in a press release: “Today’s most successful innovators strike a strategic balance between internal and external innovation. They are smart and efficient at scanning for external ideas-and deft at bringing them inside.”

According to BCG, Apple has been the world’s most innovative company over the last 11 years, thanks to its massive spending on research and development (R&D) and huge fan following around the globe. Google’s famous 20% rule and problem solving strategies helped it maintain its second place. Tesla is playing a disruptive role in two of the world’s biggest industries: energy and transportation.

BTIG reiterates a Buy rating for PayPal, and lists some questions the management might answer in its investor day next week

Ahead of PayPal Holdings, Inc. (NASDAQ:PYPL) analyst day next week, sell-side firm BTIG in its report has reiterated a Buy rating for the company, with a price target (PT) of $48.00.

Mark Palmer, analyst at BTIG in his report mentioned some key questions which PayPal’s management is expected to answer to satisfy investors’ concerns. Some of the questions mentioned in the sell-side report are mentioned below.

Firstly, the report mentioned how the management itself characterizes the pipeline of its possible new partnerships in future with issuers, networks, and others. Moreover, up to what extent, the management is flexible enough with regards to steering along with data sharing and advanced discussions with its potential future partners. Also, in order to be firm with its new approach, what is the underlying cost-benefit analysis in this regard?

The report further stated that Venmo, PayPal’s peer-to-peer money transfer service’s, Total Payment Volume (TPV) for the 1Q amounted to $3.2 billion. This number was about 154% higher on Year-over-Year (YoY) basis, and reflected a growth of around 4% in its TPV as compared to 2% in same period last year.

Despite such growth, Venmo’s monetization continues to remain a question. The management during 1Q conference call this year had mentioned that its pilot program by which Venmo’s users have the facility to pay for their purchases at merchants which accept PayPal has about 550,000 users.

In its 10-Q filing back on April 28, the company disclosed that it had received Civil Investigative Demand (CID) from the Federal Trade Commission (FTC) in order to determine whether the company has been engaged in any kind of unfair practices or not. The report also raised the question whether PayPal’s CEO Mr. Dan Schulman still believed that Venmo would be completely monetized by the end of this year, as he had mentioned in 3QFY15 earnings call?

In addition, the analyst highlighted if the management will disclose the cost savings it could achieve via the above mentioned efforts. Also, how should its investors perceive the timing of when these savings would be realized?

Mark Palmer also inquired what additional details can PayPal provide to its investors regarding its credit portfolio? Moreover, what’s the thought of the management regarding the extent to which it would allow its subprime customers to use PayPal Credit in the future.

Valeant’s glaucoma and intraocular hypertension drug has been rejected by the FDA; The Country Caller discusses why

Valeant Pharmaceuticals Intl. Inc. (NYSE:VRX) has received a Complete Response Letter (CRL) from the US Food and Drug Administration today over the New Drug Application it submitted for its pressure-reducing eye drop named “Vesneo” for intraocular hypertension and glaucoma patients. The FDA has raised some concerns related to deficiencies it identified in its inspection of Valeant’s Bausch + Lomb facility.

Vesneo has been manufactured as a once-a-day treatment for patients. However, the FDA believes some of Valeant’s practices at the facility, where it manufactured Vesneo, fell short of the Current Good Manufacturing Practices (CGMP) standard. It did not raise any safety concerns related to the NDA for the drug. The drug maker aims to meet with the FDA in order to resolve the issue as soon as possible.

Recently, the FDA also issued a CRL to AstraZeneca plc (ADR) (NYSE:AZN) and ZS Pharma, the biotech firm it acquired. That letter was issued over a hyperkalemia drug both the companies manufactured together. As a result, the approval the drug was to get has been delayed by a year.

Earlier this year as well, Valeant’s Bausch + Lomb unit had to face some issues. In February, it had to recall a drug for dilated eyes after finding out that over a million bottles have been sent out with wrong medication inserts.

This is not the only problem for Valeant though. The drug maker has seen its market capital shrink several folds to $8 billion, as shares plunged nearly 76% year-to-date through Thursday. The Canadian company’s controversial practices have tarnished investor sentiments on the stock.

The consensus data on FactSet says analysts hold five Buy, one Overweight, 11 Hold, one Underweight, and three Sell ratings on Valeant share. They also hold a 12-month consensus price target of $37.78 on the stock, reflecting 54.33% upside potential over the previous close.

We are ignorant of any bullish run, as we persist that positive developments are far from reality

It has been a while since the EV Maker Tesla Motors Inc. (NASDAQ:TSLA) entered our bearish books, but our views haven’t changed. Perhaps we believe that there is nothing much that has been done to fix up things as yet. In fact, matters have worsened for the $30 billion company in the last three months. This is why we are ignorant of any bullish run, as we persist that positive developments are far from reality.

The fact is that day by day, the twelve-year-old company is losing its charm, which once persisted as a luxury EV maker. Although there is still some popularity left for the Palo Alto company, but whether or not it sustain remains one of our prime concerns. TheCountryCaller has already discussed how fast Tesla Motors is burning its liquid resources. Moreover, frequent visits to the capital markets for raising funds is another concern for us.

Although we agree that such financial conditions are quite likely at the time of rapid expansion, but then again, internal controls are important. For Tesla, internal controls haven’t been able to make their way out of the papers as yet. Even for the upcoming quarterly earnings, we do not expect some improvements in the financial position.

However, Elon Musk seems to be a lot more active with regards to financial matters lately. It would be a lot better if the words are visible in actions. We expect November to be a very important month for the company, as Elon Musk’s company is set to release its Q3 earnings. If we get to see some improvements by then, we might just consider Tesla as a possible pick for us in the auto-sector. And by improvements, we do not only mean good topline and bottom-line numbers, but an all-round improvement in key areas such as cash flows and cost per vehicle.