The Zacks Analyst Blog Highlights: Berkshire Hathaway, Citigroup, Leucadia National, Apple and Amazon.com

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Jul 08, 2011, 09:30 ET

CHICAGO, July 8, 2011 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Berkshire Hathaway Inc. (NYSE: BRK.B), Citigroup Inc. (NYSE: C), Leucadia National Corp. (NYSE: LUK), Apple Inc. (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN).

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Here are highlights from Thursday's Analyst Blog:

Berkshire in Race for Citi Unit?

Berkshire Hathaway Inc. (NYSE: BRK.B) is said to be in race for the consumer lending unit of Citigroup Inc. (NYSE: C), according to a Wall Street Journal report. Berkshire is a part of the bidding group comprising private-equity investment firm Centerbridge Capital Partners LLC and Leucadia National Corp. (NYSE: LUK) and is said to be negotiating the deal.

Last Friday, Citigroup completed the rebranding of its entire U.S. full service network of 1,300 stores from CitiFinancial to OneMain Financial. The rebranding plan was announced last December. The rebranding gives the company an identity that better suits its image and activity. Citi is disposing of its non-core operations and CitiFinancial happens to be a part of that unit. The change in name is also viewed as a preparatory step toward achieving that end.

Citi intends to sell the unit to a well-capitalized company and Berkshire happens to be one. It already has consumer lending operations and can benefit substantially if it can win this deal.

Citigroup's long-term strategy to shrink non-core assets and increase its fee-based business mix would improve its valuation over time. The divestiture of Citi Holdings, its legacy problem assets portfolio, is also on track. As a matter of fact, Citi has already sold a number of its non-core operations.

This run-off will ultimately improve the company's risk profile and free up capital that it continues to invest in its core businesses. Citicorp, the company's core business portfolio, also remains attractive. International business is gaining momentum and should support its earnings.

Yet, we believe that solid earnings at the company would remain elusive until its revenues experience a decent growth. Regulatory issues and sluggish economic recovery also remain concerns.

Citi shares currently retain the Zacks #3 Rank, which translates into a short-term Hold rating. The company also has a Neutral recommendation from us.

Apple Injunction Big Rejected

Apple Inc. (Nasdaq: AAPL) received an adverse ruling from a federal judge in Oakland, California. Apple had sought to prevent Amazon.com Inc. (Nasdaq: AMZN) from using the "App Store" name, according to a report from news agency Reuters.

The judge rejected Apple's preliminary injunction petition owing to the iPhone maker's failure to establish its claim that there was a "likelihood of confusion" with Amazon's services.

Earlier, in March 2011, Apple filed a trademark infringement lawsuit against Amazon, accusing the latter of using the words "App Store" since January 2011 for its mobile software download service, stating that Amazon violated the trademark law, potentially confusing developers and consumers.

Apple also argued that Amazon has been promoting a program called Angry Birds Rio on its website with plans to launch it soon. Apple's objection is related to the fact that its App Store already boasts a very popular program called Angry Birds.

Apple requested the court to restrict Amazon from using the name but did not make a claim for damages. The trial date is expected in October 2012.

Amazon, in its defense, stated that the company uses the word "Appstore" without a space in between and a lower case "s," not the way Apple uses it. Amazon further argued that the term is generic and therefore not protectable.

On July 17, 2008 Apple gained the trademark right to use the term "App Store" from the US Patent and Trademark office following the roll out of its 3G-enabled iPhone. Apple's App Store has been the most successful of its kind, offering over 350,000 games, news and various other downloadable applications for Apple devices such as iPhones, iPods and iPads.

Apple and Amazon are direct competitors in the digital downloading space, as well as in other businesses such as e-books and online movie sales.

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