The Zacks Analyst Blog Highlights: Qualcomm, Google, Apple, Sony and McDonald's

Sep 06, 2013, 09:30 ET from Zacks Investment Research, Inc.

CHICAGO, Sept. 6, 2013 /PRNewswire/ -- 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 the Qualcomm Inc. (Nasdaq: QCOM-Free Report), Google Inc. (Nasdaq: GOOG-Free Report), Apple Inc. (Nasdaq: AAPL-Free Report), Sony Corp. (NYSE: SNE-Free Report) and McDonald's Corp. (NYSE: MCD-Free Report).


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Here are highlights from Thursday's Analyst Blog:

QCOM Intros Toq Smartwatch


Connected Experiences, Inc., the business arm of Qualcomm Inc. (Nasdaq: QCOM-Free Report), has recently unveiled a smartwatch, Toq. The smart device is expected to be shipped from mid-Oct.

Though Toq is neither a smartphone nor a tablet, the device can synchronize with the user's smartphones, enabling texts, phone calls and alerts from Facebook and Whatsapp.

Samsung has launched a similar smart accessory – Galaxy Gear smartwatch – with Qualcomm. To remain competitive, we expect Qualcomm to price the smartwatch around Samsung's device which costs $300.

Toq's screen has Mirasol display technology, thereby allowing clarity in display even in daylight. It is powered with Qualcomm's 200 MHz Cortex M3 processor and is compatible with Google Inc.'s (Nasdaq: GOOG-Free Report) Android devices. It is also expected to support Apple Inc.'s (Nasdaq: AAPL-Free Report) devices in the future.

It is available in black and white with a wireless Bluetooth headset and battery charger. Qualcomm will bring limited numbers of its much-hyped smartwatches initially to create market demand for its advanced technology.

Most high-end smartphones are powered with Qualcomm's Snapdragon processors as the company is one of the leading suppliers of LTE-based chipsets. The popularity of these processors will further gain traction as the recently-launched handsets like Samsung Electronic's Galaxy S4, Sony Corp.'s (NYSE: SNE-Free Report)  Sony Xperia Z and BlackBerry Limited's BlackBerry Z10 are using Qualcomm's chipsets.

In the recently concluded third quarter of 2013, Qualcomm shipped approximately 173 million CDMA-based MSM chipsets, up 14% year over year.

Currently, Qualcomm carries a Zacks Rank #3 (Hold).


Will McDonalds' Dollar Menu Cost More?


According to media reports, McDonald's Corp. (NYSE: MCD-Free Report) is trying to alter its famous "Dollar Menu" by including items that cost more than a dollar. The new version of the menu named "Dollar Menu & More" is expected to hit U.S. stores this year.

The decision came in the wake of shrinking profits. McDonald's and other fast-food chains have been relying heavily on promotions, value menu and low-priced options to strengthen their position in a market where consumer confidence is faltering. "Dollar Menu" is such an option. While these sales building measures drive comps, they prove detrimental to margins if exercised on a long-term basis.

The "Dollar Menu" program -- launched almost a decade ago and accounting for around 13%--14% of total sales -- has been a driving force in generating sales even in the time of recession. Over the years, management has been trying to shore up this line. In fact, in the recently-concluded second quarter, McDonald's added the Grilled Onion Cheddar Sandwich, Hot 'n Spicy McChicken and some limited time offer selections to help the product line stay competitive.

However, the products were not margin friendly, which is why the world's biggest hamburger chain had to alter its menu options over the years to adjust with rising food prices.

Presently, the revamped offering is in a test phase in five markets across the country. As per CNBC reports, there are three pricing points for the revamped menu, $1, $2 and $5, and it comprises "shareable" items like 20-piece McNuggets. So far, the response from the test markets has been encouraging.  

The company tested another version of the menu with price points of $1, $1.79 and $4.99. These comprise several chicken items and burgers with an additional beef patty or bacon toppings. However, the changes are yet to be finalized.

McDonald's has a Zacks Rank #4 (Sell).


Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.


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