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Facebook Inc. (FB) and eBay Inc. (EBAY) are two leading online companies, with strong growth, receiving positive analysts’ calls recently. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be reviewed.
FB was up 0.23% and closed at $26.55 on March 19, 2013. FB had been trading in the range of $17.55-$45 in the past 52 weeks. FB has a market cap of $63.25B.
On March 19, 2013, JMP Securities initiated coverage on FB with a market perform rating. Analysts currently have a mean target price of $33.44 and a median target price of $34.00, suggesting 25.95%-28.06 upside potential. Analysts, on average, are estimating an EPS of $0.13 with revenue of $1.45B for the current quarter ending in March 2013. For 2013, analysts are predicting an EPS of $0.57 with revenue of $6.66B, which is 30.90% higher than 2012.
Facebook on Tuesday announced “Lookalike Audiences,” a new feature for advertisers. The company claims the new targeting technique offers lower cost per checkout, lower cost per acquisition, larger purchase size, as well as faster and increased return on investment.
Fundamentally, despite the recent pullback, FB’s valuation remains unreasonably high with P/E of 2655 and P/FCF of 167.76. However, if FB can achieve its estimated long-term annual EPS growth of 29.04% for the next 5 years, the valuation will become more justified. On the positive end, FB has a total cash of $9.63B with a total debt of $2.36B. FB generates a positive operating cash flow of $1.61B with a levered free cash flow of $412.38M.
ArcelorMittal (MT) and Mosaic Co (MOS), both with lower Forward P/E and dividend distribution, are two basic materials stocks recovering from the recent slump and had received positive upgrades from analysts recently. Both stocks will be analyzed fundamentally and technically in this article. Investing strategies will also be presented.
MT was up 1.15% and closed at $14.89 on March 11, 2013. MT had been trading in the range of $13.28-$21.61 in the past 52 weeks. MT has a market cap of $23.07B with a high beta of 2.15.
According to the report from Zacks on March 8, 2013, MT remains affected by the challenging economic conditions in Europe. It is also exposed to volatility in steel pricing and tough competition and has significant debt. The effect of price declines was witnessed across all segments in the fourth quarter and led to a contraction in the top line. MT still retains a strong sell rating with Zacks.
However, on March 11, 2013, UBS upgraded MT from neutral to buy. Analysts said if the company reached its debt target by the end of 2013, it might regain investment grade status. Asset optimization in Europe could also benefit the stock. Analysts currently have a mean target price of $20.44 and a median target price of $18.91 for MT. Analysts, on average, are estimating an EPS of -$0.06 for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $0.65 with revenue of $86.14B, which is 2.30% more than 2012.
Citigroup (C) and Credit Suisse Group (CS) are two financial stocks that received the most upgrades in the past three months. In this article, both stocks will be analyzed fundamentally and technically. Investing strategies will also be reviewed.
Citigroup is a leading global bank operating in more than 160 countries and jurisdictions. C was up 2.25% and closed at $44.58 on March 6, 2013. C had been trading in the range of $24.61-$44.75 in the past 52 weeks. C has a market cap of $135.47B with a high beta of 2.61.
Citigroup had received six upgrades and one new coverage from several analysts in the past three months. On Jan 22, 2013, Evercore Partners initiated the new coverage on C with an equal weight rating and a price target of $43.00. On January 17, 2013, Intra-day CLSA’s Mike Mayo upgraded C from outperform to buy with a price target of $50.00 (from $46.00) following Q4 results. On January 4, 2013, Goldman Sachs added C to its conviction buy List with a price target of $49.00 (from $42.00). Goldman Sachs indicated that the shares are miss priced given its earnings power, especially considering further restructuring could result in an 11% ROTCE over time. On January 3, 2013, JMP Securities and Sterne Agee had both upgraded C to market perform and buy rating, respectively. On December 19, 2012, Morgan Stanley upgraded C from equal weight to overweight. Lastly, Meredith Whitney Advisory upgraded C from hold to buy, according to CNBC.
Seadrill And Freeport-McMoRan Copper & Gold: Growth And Income, Low Valuation And Upgrades [Seeking Alpha]
Seadrill Ltd (SDRL) and Freeport-McMoRan Copper & Gold (FCX), both undervalued and providing a good mix of income and growth, had received positive upgrades from analysts recently. Both stocks will be updated for their recent developments and will be analyzed fundamentally and technically. Investing strategies will also be presented.
Seadrill is an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. SDRL was up 2.06% and closed at $37.58 on March 5, 2013. SDRL had been trading in the range of $31.37-$41.95 in the past 52 weeks. SDRL has a market cap of $17.63B with a high beta of 2.00.
SDRL was upgraded by research analysts at HSBC from a “neutral” rating to an “overweight” rating with a target price of NOK 255 ($44.75) on March 5, 2013. Analysts currently have a mean target price of $43.23 and a median target price of $46.00 for SDRL. Analysts are estimating an EPS of $0.60 with revenue of $1.15B for the current quarter ending in March 13, 2013. For 2013, analysts are projecting an EPS of $2.99 with revenue of $4.97B, which is 10.90% higher than 2012.
As reported on March 5, 2013, Seadrill is contemplating issuing new senior unsecured bonds in the Norwegian bond market with maturity in March 2018. The net proceeds from the Bond Issue will be used for general corporate purposes.
Priceline.com Inc. (PCLN), Target Corporation (TGT), and AFLAC Incorporated (AFL) had received positive upgrades from analysts recently. In this article, these 3 stocks, which are generating strong cash flow with fair valuation, will be analyzed fundamentally and technically. Investing strategies will also be reviewed.
Priceline.com Inc. is an online travel company. PCLN was up 0.94% and closed at $695.62 on March 1, 2013. PCLN had been trading in the range of $553.42-$774.96 in the past 52 weeks. PCLN has a market cap of $34.69B with a beta of 1.28.
On March 1, 2013, Lazard Capital upgraded PCLN from neutral to buy. Analysts have a mean target price of $799.09 and a median target price of $800.00 for PCLN. Analysts, on average, are estimating an EPS of $5.26 with revenue of $1.26B for the current quarter ending in March, 2013. For 2013, analysts are projecting an EPS of $38.17 with revenue of $6.42B, which is 22.10% higher than 2012.
Both Visa Inc. (V) and MasterCard Incorporated (MA) had received positive upgrades from analysts recently. In this article, both companies will be analyzed fundamentally and technically. Options strategies will also be reviewed for investors.
Visa Inc. is a global payments technology company that connects consumers, businesses, banks and governments in more than 200 countries, enabling them to use digital currency instead of check and cash. Visa operates processing networks, VisaNet, and an open-loop payment networks. The company charges its clients different fees based on the dollar volume and the number of transactions. V was up 1.26% and closed at $159.43 on February 22, 2013. V had been trading in the range of $111.94-$162.77 in the past 52 weeks. V has a low beta of 0.76.
On February 22, 2013, V was upgraded by Guggenheim to Buy. On February 21, 2013, UBS upgraded V from Sell to Neutral and increased its price target from $123 to $156 after admitting their negative call on the stock was “simply wrong.” As said by the analyst, John T. Williams,
“We are upgrading V to Neutral following 1QFY13 earnings and its guidance reiteration. While shares have underperformed YTD (+6.2% vs. the S&P 500 +9.0%), we believe intact long-term guidance, operating leverage, the dividend, capital allocation options (i.e. buybacks), and no exposure to Europe will provide a floor-despite slower global spending growth trends.”
Analysts have an overall Buy rating with an average price target of $150.04 for Visa. V’s current price of $159.43 is 5.9% above analysts’ average price target.
The Coca-Cola Company (KO) is the world’s largest non-alcoholic beverage company, which owns or licenses and markets more than 500 non-alcoholic beverage brands, including Coca-Cola, Diet Coke, Fanta, Sprite, Dasani, Powerade, and Minute Maid. The Coca-Cola Company has one of the widest moats in the consumer beverage industry with its diversified brands and extensive distribution network. Recent developments for KO will be updated in this article.
Q4, 2012 Earnings, Beating Profit and Missing Revenue
KO’s net income climbed to $1.87B, or 41 cents a share, for Q4, 2012. Excluding restructuring costs and other items, profit was 45 cents a share, compared with the 44 cents average of analysts’ estimates compiled by Bloomberg. KO’s revenue for Q4 rose 4 percent to $11.46B, missing analysts’ average estimate of $11.53B, according to Thomson Reuters I/B/E/S. Sales of non-carbonated drinks in North America such as Powerade helped counter lower demand in Europe. The global sales volume rose 3 percent, driven by international growth.
KO grew the worldwide volume by 3% in the quarter and 4% for the full year. The company met its long-term volume revenue and profit targets for the full year. KO is on the right track to doubling its systems’ revenues by 2020 to $200B.
Cisco Systems, Inc. (CSCO) is the world’s leading supplier of data networking equipment and software. CSCO closed at $20.99 with a 0.71% loss on February 14, 2013 despite better-than-expected Q2 earnings.
Q2, 2013 Earnings
On February 13, 2013, CSCO reported Q2, 2013 earnings of 47 cents per share, beating Zacks Consensus Estimate of 43 cents per share on higher revenue and lower-than-expected operating expenses. Revenues increased 5.2% year-over-year to $12.1B, where products (78% of total revenue) were up 3.3% year-over-year to $9.4B and services (22% of total revenue) increased 12.5% year-over-year to $2.7B. Below are Q2 revenue growth and Q2 product orders breakdown, as well as Q2 revenue breakdown by product category.
Q2 Revenue Growth and Product Orders
|Americas region||Asia-Pacific, Japan and China (APJC)||Europe, Middle East and Africa (EMEA)|
|Revenue Growth (vs. Year-ago quarter)||+9%||+8%||-5%|
Q2 Revenue Breakdown by Product Category
|% of Revenue||Change (Year-over-Year)|
|Service Provider Video||10.0%||20.0%|
Gross margin decreased by 80 basis points to 60.7% as compared to the year-ago quarter due to an unfavorable product mix. The net operating margin also decreased 70 bps to 23.0%. Research and development and general and administrative costs were both up while sales and marketing expenses declined.