The Zacks Analyst Blog Highlights: Yahoo, Intel, Facebook, Twitter and Goldman Sachs Group
CHICAGO, Dec. 10, 2013 /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 Yahoo (Nasdaq:YHOO-Free Report), Intel (Nasdaq:INTC-Free Report), Facebook (Nasdaq:FB-Free Report), Twitter (NYSE:TWTR-Free Report) and The Goldman Sachs Group, Inc. (NYSE:GS-Free Report).
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Here are highlights from Monday's Analyst Blog:
Technology Stock Roundup
Last week, Yahoo (Nasdaq:YHOO-Free Report) continued on its buying spree (this time with a focus on video), while Intel (Nasdaq:INTC-Free Report) shares responded to data that the disrupting tablet market could be letting off.
Yahoo's Video Investments Continue
Last week, Yahoo made three acquisitions, two of which could help video delivery at the company. Yahoo's recent product introductions and revamps have included an element of coolness and any future video platform from the company is likely to fit the same description.
The first of the two acquisitions was a team of developers at DreamWorks Animation that created the app called Ptch. The app allows the compiling of event photos and videos by multiple users on their smartphones to create a more complete picture of the event. Ptch is being shut down, with the technology moving to Yahoo.
The other acquisition was of a startup called EvntLive, which has developed a platform for streaming of live concerts, on-demand streaming of previously-recorded live shows and an interactive platform for sharing opinions and comments.
Mayer said earlier that the focus of acquisitions was likely to move from mobile to advertising technology and video. These acquisitions indicate that we are probably looking at a new or revamped video platform from Yahoo that will take video consumption to the next level.
Moderating Tablet Demand Breathes Life into Intel
Investment firm J.P. Morgan Securities published a report on Dec 4 that provided data pointing to softening tablet demand this year followed by strengthening PC demand next year. The firm noted some positive signs in the PC supply chain for the first time in two years. Shares of Intel, which is still largely dependent on the PC market, jumped in response.
Earlier in the week, a Wells Fargo analyst reiterated his Outperform rating on Intel shares. The analyst said that there were chances of margin improvement due to stable chip prices and lower processing costs. But Intel has already decided to push its advanced technology into the mobile segment until more suitable mobile-ready products are available. Therefore, although its processing costs continue to decline, the company's attempt to capture market share (even at the lowest-end Chromebooks) will remain a pressure on margins.
Intel is still largely viewed as a PC component supplier. While its latest mobile products hold promise, Intel has missed the 2013 holiday season, which means that the large-scale adoption of its latest mobile chips has been pushed back a few quarters. That said, Intel's 2014 guidance doesn't look aggressive, so any improvement in PC demand should be good news for the company.
The Secret Behind Facebook's Mobile Growth
Facebook's (Nasdaq:FB-Free Report) mobile business appears to have grown in leaps and bounds and last week, a product manager at the company explained how. The secret appears to be a phenomenon called mobile app install ads, which are nothing more than ads for apps that get streamed in the Facebook news feed.
In itself this doesn't appear to be too exciting since most ads on Facebook appear in the newsfeed. But the reason this has proved so successful is that a person clicking on the ad is taken right away to the app download page, which increases the chances of the app getting installed.
Facebook also provided some rather astonishing numbers of the apps downloaded this way. It says that there were 175 million downloads since January. Since it had stated earlier that there were 25 million downloads in the first quarter, this means 150 million downloads in the few months since then, which looks to be a very high growth rate. Social-ad shop AdParlor estimates that Facebook charges $2.50 per install, which means that nearly a fifth of its mobile ad revenue comes from these apps.
Facebook's huge success with mobile app install ads could be the reason that other social networking companies, such as Twitter (NYSE:TWTR-Free Report) are also testing the format.
Why Should You Stay Invested in Goldman?
Shares of The Goldman Sachs Group, Inc. (NYSE:GS-Free Report) closed at $167.21 on Dec 6, recording a year-to-date return of 28.7%. Impressive organic growth, strong capital deployment activities, strategic business diversification and continuous improvement in expense management were the driving forces behind this growth story. Hence, keeping its shares in your portfolio should not disappoint.
However, we are not very confident that these positive factors will translate into further price appreciation going forward as a sluggish economic recovery and stringent regulatory requirements would put considerable pressure on its top line. Consequently, adding more shares of Goldman to your portfolio may not be a good idea.
Why This Stance?
Goldman's third-quarter 2013 earnings per share outpaced the Zacks Consensus Estimate. Results reflected declining total expenses and a strong capital position. However, a fall in the top line was the headwind for the quarter.
Goldman's stable capital position allows it to deploy capital meaningfully. The company not only has a share repurchase program in place, but also hikes dividend to enhance shareholder value. On Oct 17, the company declared a 10% hike in its quarterly dividend.
However, unfavorable macroeconomic issues are expected to reduce client activity, thereby affecting revenues from the Investment management division of the company.
The company has seen a mixed track record when it comes to estimate revisions and the Zacks Consensus Estimate has not been in trend either. As a result, the company currently carries a Zacks Rank #3 (Hold). Over the last 60 days, the Zacks Consensus Estimate for 2013 remained almost flat at $15.06 per share, while for 2014 it declined roughly 1% to $15.26 per share.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
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