Insiders' Blog

Here's Why Apple (AAPL) Should Buy Yahoo! (YHOO) Feb 22, 2012 03:14PM

The case for Apple (Nasdaq: AAPL) buying Yahoo! (Nasdaq: YHOO) is an interesting one...

Though the idea has been mulled in the past by investors and traders alike, it was mostly as a fleeting thought. A recent article in Forbes, however, makes a few solid points for the move.

• Yahoo! is insanely inexpensive. Forbes noted Yahoo!'s market cap is just $18 billion; Apple probably wouldn't want Yahoo! Japan or Yahoo!'s Alibaba stake. With these stakes recently valued $17 billion (which Yahoo! said was too low), Apple could sell those assets for $18 billion in a cash-rich split and effectively come out with $12 billion in cash and $6 billion of other assets.
  
  Assuming a 30 percent premium for Yahoo! (laughable, but Yahoo! shares have been 30 percent higher within the last year) less what Apple would get back in the Asian sale, the company could pay only $8 billion in cash for Yahoo!.
  
  
• Forbes questions whether Apple is still serious with its iAds division. After acquiring Quattro Wireless and launching iAds to much fanfare, the momentum has subsided. With Yahoo!, Forbes argues Apple will get a hungry sales team which has been somewhat of the whipping boy over the last few years.
  
  
• Apple's ecosystem needs to expand. Google (Nasdaq: GOOG) hosts tons of mobile info apps already pre-installed, from Maps to Search. Apple lacks a lot of the same features, but Yahoo! has offerings like Flickr, Yahoo! Finance, and Video which would bolster Apples iOS.
  
  
• Yahoo!, though currently outsourcing search to Microsoft's (Nasdaq: MSFT) Bing, could cancel that contract and improve Siri's results for voice search. Apple could partner with Microsoft, Forbes said, but it's more likely to want to go out on its own.
  
  
• Rounding out the list are patents (Yahoo! has at least 1,000), Payments (could appear on iPhone 5, Yahoo! CEO Scott Thompson also ran PayPal), IntoNow (a potentially huge social app for TV viewing, could meld into Apple's rumored TV set).

Q4 Results Show Smartphones Are Not Killing Garmin (GRMN) Feb 22, 2012 01:21PM

In opposition to the Dow Jones Industrial Average Wednesday afternoon, Garmin (Nasdaq: GRMN) shares are killing it following fourth-quarter numbers. The stock last traded at $48.56, up 8.6 percent from Tuesday's closing price.

Earnings were 96 cents per share on revs of $910 million, punching analyst estimates in the face. The Street was modeling for EPS of 66 cents and revs of $770 million, missing results by 31 percent and 15 percent, respectively.

The company said it is anticipating 2012 earnings of $2.45-$2.60 per share on sales of $2.7-$2.8 billion. Analysts on the Street currently expect Garmin to issue FY12 EPS of $2.41 on sales of $2.55 billion.

Shares of Garmin have been on a nice upswing since the end of last September, with a little hiccup for a few sessions in late November. The stock is comfortably above levels not seen since the first week of June 2008, more than 3 years ago.

Carnival (CCL) Shares Trade at Cheapest Level in Years as Value is Overlooked - Barron's Feb 22, 2012 11:41AM

Carnival Corp. (NYSE: CCL) shares are trading slightly lower Wednesday morning despite a positive outlook from Barron's earlier.

Following the January 13th disaster of the Costa Concordia -- which was operated by a Carnival subsidiary -- shares of the venerable cruise ship operator have dropped 11 percent, erasing billions of market cap in the process. Add to that increasing fuel costs, negative sentiment to the industry, and global economic issues, and Carnival shares have dropped roughly 33 percent over the last year.

But the stock may be at the cheapest point in years, according to some analysts. One from Davidson Investment Advisors, commenting to Barron's, said there's good downside protection in the asset value and Carnival also boasts a solid balance sheet.

Even with the recent economic turmoil, the appeal of cruises is still evident. With a vacation like a cruise, consumers know what they're roughly spending; ships are priced per voyage and things like food and entertainment are generally baked in. There are some extras like drinks and gambling, but those are discretionary. The simple pricing scheme helps Carnival to fill capacity quickly, even as expansion over the last 10 years has been rather rapid.

That growth is slowing though, from a recent rate of 10 percent per year to just about 3 percent per year. The upside to slowing growth is pricing becomes better. Currently, prices are hanging at 2008 levels, indicating a potential floor.

To be sure, Carnival still has lots of PR work to do following the Concordia tragedy, Barron's noted. The ship's captain abandoning ship and delaying rescue efforts didn't help, and -- just to compound things even more -- the first quarter is generally the slower season for operators which cut back on marketing expenses in favor of later months.

Overall expenses directly to Carnival are estimated to be $85 million for the Concordia incident, with insurance covering the lions share. The impact on profit should be about 12 cents per share. Additionally, asset replacement could cost about $29 per share. Adding these components up, Carnival shares are going for just 1.3 times its book value -- cheap by many standards.

So git yer investin' sea legs ready and climb aboard before Carnival's ship leaves the harbor!

Exercise or Pills? Vivus (VVUS) Investors are Banking on Pills... Feb 22, 2012 11:19AM

The general consensus is that Vivus' (Nasdaq: VVUS) Qnexa is a ridiculous drug which won't be approved by the FDA.

Here are some of the principal arguments floating around the Twitter-sphere:

• Studies also have obese people exercising, too.
  
  
• Political pressure is the most powerful argeement in favor of Qnexa.
  
  
• For $15,000 per year (or whatever it costs), someone could hire a trainer/nutritionist to address the underlying layers of obesity.

And so on.

As can be seen, many people on Twitter -- who are non-professionals in the drug world, we assume -- think that Qnexa shouldn't replace good, old-fashioned exercise. However, Qnexa may also help folks who are extremely obese to the point of not being able to exercise right out of the gate could benefit.

Currently, Vivus shares are halted as the meeting progresses. To see initial analysis from the committee members on today's panel, click here.

Those stocks that might see upside on disapproval include Orexigen Therapeutics (Nasdaq: OREX) and Arena (Nasdaq: ARNA), which saw their submission for obesity pills rejected last year by the FDA.

On a lighter note, or should we say heavier, the general consensus is that McDonald's (NYSE: MCD), Yum! (NYSE: YUM), Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), and Nestle (OTCBB: NSRGF) will see a surge upon approval.

Ford (F) Grants Board Members 25% Raise Following Strongest Year Since 1998 Feb 22, 2012 09:35AM

With last year's annual profit hit levels not seen since 1998, Ford Motor Co. (NYSE: F) has decided to increase the annual pay for its Board members by 25 percent.

Members of the Board will receive $250,000 as an annual retainer in 2012, up from $200,000 in 2011. The news comes as a relief to the old tymers who believe it truly pays to stick with a company during its hard times. Back in 2006, Ford cut the directors pay to $100,000 as the automaker looked to find financing for its restructuring plans. In 2009, management completely eliminated the Board's payment plan.

“We review all the compensation levels on a regular basis, and in the case of the board, determined this was needed to ensure we continue to attract and retain the talent we have,” Ford Spokesmen Todd Nissen told Bloomberg.

Along with the Board, Edsel Ford also received a payment increase, his first payment increase since he signed a consulting contract with the company back in 1999. Edsel will now receive $650,000 per year, a 29 percent increase from last year. Unlike the Board, which sees 60 percent of compensation come in the form of common stock, Edsel’s payment plan is an all cash contract. This shows it still pays when your great grand daddy once owned the company.