The Zacks Analyst Blog Highlights: Tyco International, Baidu, Youku Tudou, Sohu.com and Aol
CHICAGO, Jan. 2, 2014 /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 the Tyco International Ltd. (NYSE:TYC-Free Report), Baidu (Nasdaq:BIDU-Free Report), Youku Tudou (NYSE:YOKU-Free Report), Sohu.com (Nasdaq:SOHU-Free Report) and Aol Inc. (NYSE:AOL-Free Report).
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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Tuesday's Analyst Blog:
Tyco Upgraded to Buy
On Dec 28, Zacks Investment Research upgraded security and protection services provider Tyco International Ltd. (NYSE:TYC-Free Report) to a Zacks Rank #2 (Buy) on the back of solid fourth quarter fiscal 2013 results and strong long-term fundamentals.
Why the Upgrade?
Tyco reported strong fourth quarter fiscal 2013 results as both revenues and earnings increased year over year. The year-over-year rebound to earnings was driven by accelerated growth in service and products along with increased benefits of productivity initiatives.
In the last reported quarter, Tyco reported GAAP income from continuing operations of $162 million or 34 cents per share, a significant improvement from loss of $629 million or $1.36 per share incurred in the year-ago quarter. Revenues for the quarter increased 1% year over year to $2,761 million, ahead of the Zacks Consensus Estimate of $2,759 million. Organic revenues improved 1% in the quarter, primarily led by an 8% increase in products and a 4% improvement in service.
Tyco's acquisition pipeline is attractive and complements its existing businesses. The acquisitions are in line with the company's strategy and are likely to provide solid long-term returns to its shareholders. Additionally, the company strengthened its service platform with strategic purchases and accelerated growth rate in high-growth markets. Moving ahead, Tyco believes that its strong balance sheet will provide flexibility to continuously fund organic and inorganic growth initiatives and maximize return for its shareholders.
With such positive strides, the share prices are continuously moving north and touched a 52-week high of $41.44 during its trading session on Dec 27. Tyco closed the trading session on Dec 30 at $41.18, reflecting a year-to-date return of 37.3%.
The stock has potential for further accretion with a forward PE of 19.3x and long-term earnings growth expectations of 13.9%. Over the last 7 days, the earnings estimates did not show any upward or downward revision for 2013. Although there is a lacuna of estimate revisions, we envision an uptrend for the stock backed by its strong growth potential.
Baidu Fined for Copyright Infringement
A group of Chinese online video providers including Qvod Technology and Baidu (Nasdaq:BIDU-Free Report) were recently fined on grounds of copyright infringement. Both the companies have been accused of making it easier for users to find and play pirated movies and TV shows.
China has been in the news for its weak intellectual property legislation. Recently, the Chinese government has taken some stern measures for the protection of valuable intellectual properties. Due to this weak IP legislation, it had entered into innumerable disputes with the United States in the past.
According to a China online video company Youku Tudou (NYSE:YOKU-Free Report), a fine of $41,240 has been imposed on each of the two aforesaid companies by the National Copyright Administration of China (NCAC).
Following the disclosure of the fine amount, Baidu's Stock was up by a fraction while Youku's stock went down 1 %.
Earlier this year, Youku had brought copyright infringement complaints with other allies including Sohu.com (Nasdaq:SOHU-Free Report), Tencent and the Motion Picture Association of America against Baidu and Qvod.
The fines imposed by NCAC are viewed as a symbol of victory by the alliance consisting of the likes of Baidu, Sohu, Tencent and the Motion Picture Association of America.
Reportedly, the alliance has sought up to $49 million in damages for alleged copyright violations. Further, it had asked Baidu and Qvod to assist in building a positive online and mobile video ecosystem by putting an end to all their pirating actions.
Baidu, Inc. provides Internet search services in Chinese. The company also offers a Chinese language search platform for businesses to reach their customers. Baidu earned 3.25 billion yuan in advertising in the third quarter and is estimated to create 16.2 billion yuan in sales next year.
Currently, Baidu has a Zacks Rank # 2 (Buy). Aol Inc. (NYSE:AOL-Free Report) with a Zacks Rank # 1 (Strong Buy) also present a lucrative investment option this season.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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