Goldman Sachs Downgrade EBay Stocks After Valuation

EBay's stocks are no longer in the Conviction Buy list of Goldman Sachs after a poor performance

EBaywas used to be known as one of the biggest online retailers in the United States. But slowly the online auction website started to lose its charm as its rivals, Amazon and Wal-Mart, started to do more business in the market. As of now, EBay stands nowhere near to the likes of Amazon and Wal-Mart and it is trying to do better. Due to all this, it is believed that the company has been removed from the Goldman Sachs’ Conviction Buy list. The investment firm decided to remove on the basis of valuation of the company’s stocks.

Ever since it separated from the 16 years long partner, PayPal, many analysts and professionals thought that the online retailer might not be able to keep up with the fast market trend and immense pressure. But EBay Inc. should be given credit as it has done quite well which no one thought it could do so. However, according to the Goldman Sachs’ valuation, the stocks are not now on the Conviction Buy list. The company also sold its enterprise unit as it spun off its payment subsidiary a few months ago.

According to a source, “The sell-side firm has further made an upside revision in price target from $30 to $33 as it expects the company to adopt a highly focused strategy after its recent spinoff. Analysts at Goldman Sachs believe that the online retailer has significant upside in the coming quarter, mainly due to increased investment in the technology.”

EBay is currently doing well in the market considering the phase it is in but not well if compared to its usual standards. The CEO of the company, Devin Wenig, stated that the company will take some time in order to reposition its business and adjust accordingly to do well in the market. He was recently asked about the company’s performance and EBay stocks performance and he mentioned that the spinning off aftermath is taking a little bit of time but it will soon get back on track.

Mr. Devin Wenig further mentioned and highlighted other services that the company is currently offering such as EBay Plus. EBay Plus was launched as a trial program only in Germany for the time being in order to see the response.

Goldman Sachs has currently downgraded the stocks but has further mentioned that the future is bright for the company in the market. The analysts are confident and have highlighted the attractive risk/reward profile of EBay. 

Microsoft Can Change Alphabet's Game In the Driverless Car Industry

The software giant has signed a deal with Volvo to enter the automotive industry by developing driverless car technology

Alphabet Inc might be at the top of its game where making driverless technology is concerned, but the recent evolution of other tech giants in the industry stepping onto the same platform to prove their worth is yet another worrisome competition for the giant that it cannot possibly ignore. Microsoft Corporation has come out to prove that the search engine giant might not be the lone dominant entity in the automotive vehicle business for a very long time, as it has signed up a deal with Volvo to start producing and developing technology to make driverless cars. Also, the software giant has decided to strike up a new and improved process to make buying cars easy for the customers.

Both the giants’ involvement as a partnership in the automotive industry is enough for the rivals to have their concerns raised about their own standing in the arena presently. Microsoft has so far not discussed the real dates of the release or initiation of the project with Volvo, but Zhejiang Geely’s company has informed the market of the fact that it will be making use of HoloLens to be incorporated in the new driverless cars. Analysts are of the opinion that this brand new partnership is directed towards the slowly establishing autonomous car industry and it is expected to go a long way.

Microsoft released ‘Windows in the Car’ in April which is software similar to CarPlay by Apple and Google’s Android Auto. The giant has slowly been getting in line with the progress that its rivals are making in the context and also upgraded the software with Cortana three months back. However, the software failed to attract much attention of the users as most of the limelight was stolen by QNX, which is BlackBerry’s version of the vehicle software.

Analysts are analyzing the partnership’s ongoing activities so far and have come to the conclusion that with the help of Volvo’s part, Microsoft business is set to make a big comeback in the overall industry. Even though Volvo is not an automotive brand with a massive fan following yet, analysts believe that this partnership is still expected to go a longer way to where Google is currently in the market. This is majorly because its parent company Alphabet has not yet gotten itself in any major deals regarding the autonomous technology yet which keeps the Windows makers a step ahead from it. 

Microsoft stock closed at $53.93 on Friday.

Decline Witnessed At Nike, Inc.

Nike Inc saw a decline in the market capitalization on Monday

A decline in the market capitalization of Nike, Inc. was observed in the most recent trading session that took place on Monday, November 23, 2015. The apparel and footwear manufacturer’s stock was being traded at a share price of $132.46 which was a decline of 0.14%.

As per the details of the trading session, the highest share price that was witnessed in the intraday trading was $133 whereas the lowest was $131.82. There was a drop of approximately 0.19 points on Monday. The volume of shares towards the end of the session was 3,567,781. The current market capital of Nike, Inc. is $112,882 million.

In a time span of one year Nike’s stock had gone up by 35.43% from its current 52-week high record which is $133.52. On the other hand, the 52-week low share price of the apparel manufacturer is $90.69; this low share price was seen on February 9 of the present fiscal year. The one year high was recorded on October 19, 2015.

During the intraday trading session on Monday, the stock was being traded negatively at $132.46 with a composite uptick figure of $129.75 million and a downtick figure of $102.34. The change in the stock in the past seven days was of -0.14%. The earnings per share that were reported by the sportswear and footwear manufacturer were $3.96 with a price to earnings ratio of 33.45.

Additionally, quite a few stock experts have commented on the sportswear company’s stock out of which BB&T Capital, a research and brokerage firm has upgraded the rating for the company. From an initial rating of Hold, Nike’s stock is at a rating of Buy now, as par the reported issued by the firm on October `19, 2015.

Furthermore, Insider Trading was witnessed at Nike when the Securities and Exchange Commission reported that Jackson Jeanne, the president of product and merchandise sold shares of the company. This transaction was of $1,529,125 as the shares sold were 12,500 at a share price of $122.33 per share. Approximately, 3.7% of the stock of the company is owned by Insiders, while 65.05% of the stock if owned by Institutional Investors, as stated in the proxy statement.

In three months’ time the change in the stock owned by the insiders was -4.8% while the change witnessed in the stock owned by the Institutional investors was -8.03%.  On a separate note, according to news the company has even understated its earnings for the sole reason of global nature of the company’s operations. 

Cisco Plans To Buy Acano For $700 Million

Cisco is all set to buy Acano  for $700 million

Cisco Systems Inc. has finally agreed to buy Acano Ltd. which was closely held by them for $700 million. This is the recent move by the Silicon Valley giant so that they can expand its video conferencing and collaboration business offerings.

Cisco is known in the tech world for its networking equipment and is considered to be a key player in the collaboration market. The acquisitions made in the past have given the company a strong portfolio. This encompasses the purchase of a Norway based video conferencing company in 2010 known as Tandberg ASA for $3.3 billion. Along with that, they have also signed a deal to buy WebEx Communication – a web meeting service for $3.2 billion.

According to the company, this month they have been successful in reporting a rise in revenue from the collaborations to 17% with a worth of $1.12 billion during the first trimester. The company recently estimated that about one in 10 of the conference rooms have video connectivity. So now the company has joined forces to modify the ratio where they wish to increase it to four from one in the coming ten years.

Acano on the other hand is a London based company that deals in hardware that can be installed by companies or cloud services to manage the video conferences. The thing that discriminates the service is the ability to connect the conference rooms via various hardware providers.

Rowan Trollope, the senior vice president and the general manger for the Cisco’s collaboration technology group stated, “Our big customers are telling us, ‘we want to do more with Cisco but it has to coexist with our legacy infrastructure.” He further added, “Acano is the bridge that makes everything work with everything else.”

Another benefit is that various companies now prefer to allow the external cloud computing service providers to regulate the video communications added Mr. Trollope. Cisco is one of those companies that is already offering this service. Thus, by joining hands with Acano, they can further enhance this experience.

The firm is already known for making acquisitions worth billions of dollars, thus now they have changed their strategy and prefer signing small deals along with forging the partnerships with big companies. The change in strategy can be governed via the latest initiatives taken by Cisco. It is now being estimated that the Acano transaction is likely to be completed by the quarter ending of Cisco on Apr. 30, 2016 as reported by the company.

Cisco stock was up 0.73% to $27.57 at market close on Friday.

Alibaba Paves Its Way Outside China To Lure Growth

Alibaba stocks slide despite initiatives by the company

Alibaba Group Holding Ltd. remains undefeated when it comes to the transforming market cap. The strategy of the company is to bolster medium and small sized business so that they can churn in revenues additionally. At this point of time the sentiment of investors is not in favor of the company, so now the best thing for them is to redeem their credibility through the promotion of small businesses.

Jack Ma, the founder of Alibaba Group has advised all the large businesses to make use of their power in an efficient manner and assist developing nations and small companies in growing with their limited resources.

The initiative taken by the company seems like a safe bet since they have been struggling to maintain their market cap. Mr. Ma while addressing the attendees at the Asia Pacific Economic Cooperation in Manila unveiled a strategy of approaching the “Small Guys”. The founder of the largest E-commerce platform in China wishes to sign an agreement that is devoted to promoting business activities without the interruption of political forces.

The problems faced by small businesses at this point of time are that they cannot really come outside the box. These businesses are under the influence of heavy taxes that make it difficult for them to diversify their business models or think creatively. Such regulations can become a cause of extreme penalties and act as a barrier in ensuring economic stability particularly in developing countries.

Bloomberg quoted Mr. Jack Ma by stating, “Trade is a freedom, trade is a human right. Trade should not be used as a tool against other nations.”

This development has penetrated when the company is finding it relatively difficult to redeem its lost market cap. It is extremely astonishing for investors that despite the company have reported a relatively positive figure during the Single Day’s sales, still the Alibaba stock have not shown any signs of going towards the bullish side. After Single’s Day it has been observed that the stocks have embraced a 6% cut in market share. The stocks of the company further slid down recently where they lost 0.20% and closed at $78.13.

The sale of counterfeit and fake goods has actually damaged the credibility of the company because of which they have to face criticism from investors. The company despite trying its best has not been able to emerge successful. Thus initiatives like these will help them to surface out and embrace a change in the long run.  

Analysts Are Pessimistic About Blackberry Ltd's Future

Blackberry Ltd, has been trying to get back in the smartphone game for a while now and has miserably failed to do so however the future does not seem entirely bad for the tech company.

According to analysts, the success of the new Blackberry Ltd seems highly unlikely. Despite of the fact that it has been labeled as the most “android secure” phone and practically is able to manage and access Android app’s entire ecosystem, analysts did initially believe that it would turn out to be big in the market.

The sole purpose for this negative remark is because Apple, Inc.’s success in the market; as reported by Tim Cook, Silicon Valley giant’s CEO, in the fourth quarter of the current fiscal year over 30% of android users switched to iPhones. The next big company in the smartphone business is Samsung so at this point Blackberry Ltd does not even come close to being successful.

Despite all this, the reviews of the novel secured android based smartphone are quite impressive. Retailers of the device are usually sold out but the exact number of devices sold by the tech company has not been disclosed as yet. According to John Chen, the CEO of the tech company said in an interview to CNBC that the multinational company has been doing reasonably well for a financial perspective. He added that the current focus of the company is growth; they will be expanding their business. Even though they currently have high fixed costs, he stated that profitability of the new device is likely to come by 2016.

The company is expecting that the profitability will come from its handset division but the analysts remain pessimistic about it. However, there still seems to some hope for the company because of the Internet of Things (IoT). Analysts are optimistic of the fact that IoT might be what brings the former glory of the business. Since IoT will be a market worth $1.7 trillion by the year 2020, Blackberry might be able to gain some profits through it. More than 50 billion devices might be connected to IoT by 2020 which will be equivalent to over seven devices connected to one person all over the world.

The plans of the company currently are to provide security to the IoT market in the future. According to popular belief however the most profit the company is such as to generate would be through its blackberry software development. The company even launched a QNX operating system in the year 2010 which is currently being used in Ford cars that connected the vehicle to the internet. As per the recommendation, investors should start investing in the company and slowly start purchasing the shares. The company has the potential to succeed in the future but merely owing to the Internet of Things.

Microsoft Corporation Earnings 1QFY16

The software giant has reported mixed earnings for the first quarter of 2016 and analysts expect it to grow further in the year

Microsoft Corporation was recently seen releasing its earnings for the first quarter of the new fiscal year right after which the analysts in the industry turned out to have all kinds of different opinions on how the giant could make sales in the future. One of such analysts is from equity firm Argus Research, and they have decided to present the software company with a ‘hold’ rating, which has just been reiterated by the firm. Previously the take of the analysts of the firm was almost the same and the investors and shareholders were advised to keep their shares on the hold for the time period.

Following the earnings release, it looks like the Microsoft’s software business has huge aims to attain but might not be able to do in the last quarter at least. The sales of its cloud computing services which includes Office 365 along with the OEM software were much lower than the figures that were actually expected out of the giant by the analysts in the market.

However, on the other side of the picture, the tech company has gone up on the revenue department in which it has reported non-GAAP earnings per share of around $0.67 which actually turned out to be beat estimations which were made at a figure of $0.58. As for the earnings that were reported in totality, the giant managed to report a revenue of $21.6 billion, which was very close to the actual estimation of $21 billion which was made by the analysts.

Analysts at Argus are of the opinion that these earnings show a positive end for the Microsoft business and it looks like the new financial year is going to be a challenge for Satya Nadella, the CEO of the company, as he is expected to experience some important product releases during his tenure which could either turn out to be a success or a struggle for the giant.

The consensus estimations made for the Microsoft stock show that around 23 equity giants have presented the company with a ‘buy’ rating whereas around 13 firms believe the stock deserves a ‘hold’ rating.

Apple Gets Upgraded By Goldman Sachs

The software giant has been upgraded by analysts at Goldman supported by success of its ecosystem

Apple stock has recently been upgraded by analysts at Goldman Sachs, who have come to realize that despite the ups and downs that the company has lately been facing, it actually does have a lot to offer to the investors for the near term future. The stock of the iPhone making company has been looked at by the analysts in the industry with a lot of speculations, and some have remained bullish about the company while some believe that the falling iPad and Mac sales might sooner or later take a toll on the share price of the company.

Apple’s stock price has been experiencing massive fluctuations on the index lately which has reportedly made the investors of the software giant quite concerned over the period of time. The bullish remarks of analysts have not helped the investors either and they have still remained confused about what to take of the high volatility of the stock lately. However, times may have changed now as analysts at Goldmna Sachs turn highly positive about the stock of the iPad creators with not only a ‘buy’ rating, but also a target on the share price of $163. This clearly suggests that the analysts have finally come to see a side of the company that could raise hopes of the investors in the long run.

According to reports, it seems like the Goldman analysts are looking at the success of the ecosystem that Apple business rolled out some time back and believe that this venture has the potential to grow even further for the company. On the other hand, the same analysts have also suggested that the iPhone makers should also bring its other products to use and start focusing monetization on them as well, apart from the revenue generation it is making from the sales of its smart phone.

Analysts in the industry, moreover, are of the opinion that the software company is in a good position to grow in the Internet of Things platform with its newly upgraded ecosystem. Not only that, the giant also has the capability to carry out a massive generation of revenue through the ecosystem, and bring back cash into the stock of the company in colossal figures.   It is believed by the analysts that the Californian company needs to think more about software than hardware at the moment, as it is very likely that the giant turns out like Blackberry in the future and starts failing in the hardware department as its products become more and more reductant with the passage of time. 

Wal-Mart Confident About Increase In Sales For The Fourth Quarter

The largest retailer in the United States is confident that for the fourth quarter for FY15, the company will see increase in its sales growth.

Wal-Mart stores reported impressive comparative sales growth for the third quarter of Fiscal year 2015. Evidently, it can be observed that the U.S. retail company is living up to what it initially stated about their new strategies working out for the company. Analysts had rather low expectations for the retailer due to its previous disappointing sales and profit reports but it managed to best analysts’ estimates. Investors are trying not to get carried away with the reports at this point as the difference between the actual sales growth and estimated growth was not very significant.

Even though, Wal-Mart reported good numbers this quarter it still faces one big trouble which includes macroeconomics headwinds. WMT is probably the only stock on the stock exchange that is down year to date by 30%. The world’s largest retailer further posted expected sales for the shopping season as well which still exceed the analysts at Wall Street’s expectations. In the trading session on Tuesday, Walmart stock rose by 2%.

The largest retailer has been facing a lot of competition from online e-commerce giants Amazon.com and dollar stores. It has not been a very easy year for Walmart, which is very clear from the efforts it has been making to get back on track. The company has continued to face competition from these e-commerce companies and retailers as the company has been increases pay wages for its workers and the strong US dollar has also been affecting the company’s performance especially from oversea sales.

On a call with reporters, the chief executive officer of the US Division Greg Foran stated that customers of the retail store have been commenting on the improvement and clean conditions of the Walmart stores. According to Walmart news, the sales at the local stores of the company have gone up by 1.5%, which marked the fifth consecutive increase in the last five quarter. This increase was based on the number of visits to the local stores as the sale per trip was comparatively low.

For the fourth quarter of the current fiscal year, which will be during the holiday season, the company stated that it’s expecting that its sales for the quarter will increase by at least 1%. Greg Foran did not comment further on this topic as to how much amount will be driven by traffic in comparison to the amount that they will be spending per trip. Although, he did seem satisfied with the company’s plans stating that they are feeling good about pulling this together.

On a separate note, the international sales of Walmart fell by 11% to approximately $29.1 million and the net income of the retail company fell by 11%. 

Facebook Expands More, Offers Free Internet to More Countries

The social media giant is planning to expand its Internet.org program to more countries, followed by success in 29 countries.

Facebook is growing as a social media company at an alarming speed on a global level and it is a fact that nobody can deny. The media company recently started a program called Internet.org through which it determined the presence of internet in even those countries that were previously deprived of it. This also included particular areas in developing countries where the basic internet facilities are still not available. Through this project, it not only offered services free but also got itself recognized and known in the eyes of the previously unprivileged people.

The social media giant has recently stated that it is planning to expand the Internet.org program to all those countries left to be touched by the internet and will be doing so eventually. Mark Zuckerberg, the CEO of the social network company, seems to be taking this idea very seriously and holds the opinion that everyone on the planet deserves to be given access to the knowledge that pours in through easy accessibility of basic internet facilities.

The social media company has already carried out provision of internet in 29 countries, reaching out to around 15 million people in total, which were previously kept in the dark due to multiple reasons. Analysts believe that the despite the arguments that have been emerging from all parts of the world, especially coming from India and Bangladesh, the program hinder the progress and idea of a free internet space with equal preference given to every site is becoming a problem with the new Facebook project.

The criticism also comes in from companies who believe that their sites are being given a low preference while other sites are preferred more through the service that the media company has decided to provide.

Even though some countries have created arguments and filed lawsuits against the social network giant for not promoting free internet in the country, some analysts believe that this program coming from its side is definitely praiseworthy, given how it has been raising awareness and creating opportunities for the parts of world that were completely ignored by the rest of the world.

Rumors also suggest that the giant might also be considered using a special aircraft called the Aquila, which will then be sent down in remote areas to provide internet services to those areas, and considered as an incredible idea to begin with. People are expecting reasonable service from Facebook that will connect them.

Tesla Cash Expenditures Might Be Worrisome For Investors

The company seems to be increasing its capital expenditures at a very quick pace, which is turning out to be troublesome for investors.

According to recent Tesla news, it was seen that the growing problem of increasing expenditures being carried out by the company is taken as a serious issue by the investors now. Last quarter, the electric carmakers reported some strong figures in the sales and revenue department, which created bullish sentiments of the investors and analysts towards its stock.

Furthermore, the company also turned out to predict a stronger than before guidance for the next quarter in line which has brought all the attention in the market to how many progressive plans it seems to be carrying for it to expect great sales output in the next fiscal period.

However, analysts at Motley Fool have shed light on the ever-increasing expenditure numbers that seem to be taking their toll for Tesla business, as it has reportedly spent around $800 million to cover expenses of two fiscal quarters, which is being taken as a huge amount to be paid by any company for the capital expenses alone.

In the letter presented to the shareholders to inform about the activities of the company during the third quarter of the year, it was seen that the information provided regarding the cash flow was rather on the negative side to be considered with the capability to make the investors turn majorly bearish towards the stock in the near future.

Currently, the increasing cash flow is one problem but the fact that Tesla operations, which are being carried out in a big number now, are not bringing back enough cash to the company either. This means that the expenditures it is paying for are not being backed up by a strong cash reserve. This, undoubtedly, means that eventually, the smart carmakers are going to face some deadly issues in its business that will be directly made evident on the stock index.

To look after the problem, the company also needs to analyze what new steps it can take to not only cut down the expenditures, but also help it to generate quick cash flow on the regular basis. This should be the priority for it to calm the investors.

More importantly, Tesla stock’s present situation can be understood by taking into consideration the actual amount that the hybrid carmakers spent to cover capital expenditures, which is reportedly $392 million for the past quarter, while the negative cash flow was recorded at $203 million by the auto making company.

Cisco Ericsson merger could simply make or break the businesses of both parties

A couple of days ago the news broke that Cisco Systems Corporation is interested in teaming up with Ericsson in order to boost both businesses. The companies were tipped to sign a deal to become network partners and boost each other’s sales by $1 billion in the coming years. The alliance formed between both parties has its fair share of positives however there are equal negatives in store as well. Cisco is the networking giant which owns both wired and wireless businesses whereas Ericsson is a major telecom company and specializes in wireless sector. However, both are aiming to dominate all the areas that come under carrier deployments.  

These companies have a lot in common. At one point, they can easily do business on their own but on the other hand both companies need each other to take it to the next level. Cisco Systems and Ericsson have been under serious pressure lately from the Chinese companies such as Huawei. Furthermore, the increasing market presence of the newly merged Nokia Alcatel imposes great threats on the companies as well.

With all of this happening, both companies are strong enough to dodge these threats and win their respective quarters. Or they could help each other’s businesses to grow significantly which is unlikely to happen. It is believed that if both parties sign a deal then their main objective will be to generate extra sales worth at $1 billion for each of them in the next 3 years. The companies know how to make it work as they have been doing it in the past by including technologies from smaller vendors. However if they get along with each, it will be a matter of time that they would be dominating the sector.

The Register reports, “The focus of the deal is around cloud computing and the IoT (internet of things, or of everything if you listen to Cisco execs), and Ericsson will receive patent license fees from its new friend, which also expects to save SEK1 billion ($115m) a year, from the deal in costs.”

The CEO of Ericsson, Hans Vestberg, recently told Bloomberg in an interview that he is not a big fan of big mergers in the industry. However he realizes that this is the best solution that it can get as it will prove to be faster and more efficient. He added, “This deal is mostly about the wireless opportunity, still far larger than the fixed networking and video markets we talk most about in Fault line.” 

Cisco stock was up 2.21% to $26.79 at market close on Monday.