CAE is a Canadian high tech company based out of Montreal, QC
Highlights and Recent News
The Good:
It's a bit of a momentum play. Record profits are good. https://www.thestar.com/business/2016/05/19/cae-hits-high-as-profit-beats-estimates.html
They just signed $180Million in new contracts. http://www.canadianmanufacturing.com/procurement/cae-discloses-180m-in-new-work-as-farnborough-airshow-gets-off-the-ground-171709/
They are involved in everything, from Health Care to mining.
http://www.ic.gc.ca/app/ccc/srch/nvgt.do?lang=eng&prtl=1&estblmntNo=234567065714&profile=cmpltPrfl&profileId=501&app=sold
The Questionable
CAE had margin issues as early as last year. But a pilot shortage could help them come out the other side. How they handle finances in good times is important to understand.
http://business.financialpost.com/news/transportation/cae-gets-boost-from-pilot-shortages-as-it-seeks-to-improve-results
CAE's president predicts that there will be soaring demand for their pilot testing products. when your stock is hot, it's not surprising to make very positive predictions about the future. Be wary of such rosy, biased predictions. But if it's well founded, it's well founded. Do the research.
http://www.theglobeandmail.com/report-on-business/cae-chief-predicts-soaring-demand-for-pilot-training-services/article30887548/
Conclusion
CAE seems like solid company, they also pay a dividend and is quite diversified.
Showing posts with label Software. Show all posts
Showing posts with label Software. Show all posts
Tuesday, July 12, 2016
Thursday, August 30, 2012
Breakthrough Tech Lets Users Surf the Web With Just Their Eyes
By Michael A Robinson
www.moneymorning.com
www.moneymorning.com
Forget about using a keyboard to type in your question on Google or Bing. Ditto for voice control on your smart phone. Soon you'll be able to control your computer or mobile device just by moving your eyes.
A British research team did just that with a new system that costs less than $100 - all with parts they could simply pull off a shelf. In a moment, I'll give you all the details. But first, let's put this breakthrough in context. You see, for most of us surfing the Web, writing emails or sending texts is so routine we don't even give it a second thought. In fact, it sometimes seems that mobile phones, in particular, have become part of our bodies. (Just try telling my teenagers to stop texting at the dinner table.)
And yet, millions around the world simply cannot join the digital age for a simple reason. Their bodies won't let them, either because of disease or severe injuries.
That covers a wide range of problems from adults with lost limbs or broken spinal cords to kids who have muscular dystrophy, an illness that causes the muscles to wither away. But all that is about to change...
A British research team did just that with a new system that costs less than $100 - all with parts they could simply pull off a shelf. In a moment, I'll give you all the details. But first, let's put this breakthrough in context. You see, for most of us surfing the Web, writing emails or sending texts is so routine we don't even give it a second thought. In fact, it sometimes seems that mobile phones, in particular, have become part of our bodies. (Just try telling my teenagers to stop texting at the dinner table.)
And yet, millions around the world simply cannot join the digital age for a simple reason. Their bodies won't let them, either because of disease or severe injuries.
That covers a wide range of problems from adults with lost limbs or broken spinal cords to kids who have muscular dystrophy, an illness that causes the muscles to wither away. But all that is about to change...
The Promise of Eye-Control Tech
Fact is, cutting-edge eye-control tech promises to have a profound impact on the way humans use a wide range of machines. We're taking about everything from controlling robots and wheelchairs to setting the timer on your coffee maker. It's thanks to the research team at Imperial College London that this tech is finally within reach.
Today's standard eye-tracking systems (like those used by the U.S. military) cost "tens of thousands of times" more money than the system they built, the research team noted. With this milestone behind us, I predict this new system - or something like it - will bring eye-control tech to the masses. Team leader Aldo Faisal agrees. He says just about anyone can learn to control devices with their eyes. In his project, people became adept at using the system in just a few minutes.
Faisal's team got their results, published July 12 in the Journal of Neural Engineering, by having test subjects play Pong, that early table-tennis video game that debuted way back in 1972. They not only played the game without a head set, test subjects also learned to surf the Web and write emails using only their eyes.
Dubbed the GT3D, the system includes two fast video-game console cameras attached to a pair of cheap glasses and "smart" software that processes the input quickly. The cameras took constant pictures of the eyes and tracked just where the pupils were pointing. That allowed the research team to figure out the precise spot where a person was looking. Turns out the system works in 3D. The research team devised ways to figure out how far in the distance the test subjects looked. This last detail could prove crucial; the spatial control would allow people to work an electric wheelchair just by looking where they want to go.
But in the near future it will become a reality for millions around the globe. It's also one of the reasons I say the world of high tech moves faster these days than what most folks can get their minds around. Consider this related piece of news that came out on the very same day... A team in the Netherlands said a new system will allow paralyzed people to control computers with just their minds.
This brain-computer link from UMC Utrecht relies on an advanced MRI scanner. Test subjects looked at a computer screen that allowed them to see just what a camera on a toy robot was looking at. In turn, the MRI scanner measured the brain activity of the test subject. Then, the computer "learned" when the four test subjects were thinking left, right, or forwards.
Each of the volunteers got the robot to complete a course of about 30 feet with four stops along the way. All the while, the "drivers" were lying inside the MRI machine - just thinking about what they wanted the robot to do. "All four study subjects were able to control the robot very quickly," said brain researcher Nick Ramsey, who led the team. "They all felt in control of the robot. This means that this type of brain-computer interface is very easy to master. Training is barely needed." Ramsey said this is a crucial step in proving the long-term potential for this type of approach. Later, patients will have electrodes implanted in their brains to track their thoughts and control robots.
It's hard to predict how long it will take either of these systems to come to market. If I had to guess, I'd say the eye-tracker will come out sooner because it's cheaper and easier to use - at least for now. But either system would be a godsend to millions of paralyzed people around the world. It will give them a brand new lease on life, a way to take control of their surroundings that today they can only dream about.
Faisal's team got their results, published July 12 in the Journal of Neural Engineering, by having test subjects play Pong, that early table-tennis video game that debuted way back in 1972. They not only played the game without a head set, test subjects also learned to surf the Web and write emails using only their eyes.
Dubbed the GT3D, the system includes two fast video-game console cameras attached to a pair of cheap glasses and "smart" software that processes the input quickly. The cameras took constant pictures of the eyes and tracked just where the pupils were pointing. That allowed the research team to figure out the precise spot where a person was looking. Turns out the system works in 3D. The research team devised ways to figure out how far in the distance the test subjects looked. This last detail could prove crucial; the spatial control would allow people to work an electric wheelchair just by looking where they want to go.
Really, the possibilities are endless...
Just by using a simple eye movement, like a wink, paralyzed patients - or any one for that matter - could turn the pages of a book in their e-reader or "tell" a robot to clear the dishes off the dinner table. No doubt, this milestone clearly fits into the Era of Radical Change. Not long ago, eye-control was the stuff of sci-fi or advanced U.S. defense platforms.But in the near future it will become a reality for millions around the globe. It's also one of the reasons I say the world of high tech moves faster these days than what most folks can get their minds around. Consider this related piece of news that came out on the very same day... A team in the Netherlands said a new system will allow paralyzed people to control computers with just their minds.
This brain-computer link from UMC Utrecht relies on an advanced MRI scanner. Test subjects looked at a computer screen that allowed them to see just what a camera on a toy robot was looking at. In turn, the MRI scanner measured the brain activity of the test subject. Then, the computer "learned" when the four test subjects were thinking left, right, or forwards.
Each of the volunteers got the robot to complete a course of about 30 feet with four stops along the way. All the while, the "drivers" were lying inside the MRI machine - just thinking about what they wanted the robot to do. "All four study subjects were able to control the robot very quickly," said brain researcher Nick Ramsey, who led the team. "They all felt in control of the robot. This means that this type of brain-computer interface is very easy to master. Training is barely needed." Ramsey said this is a crucial step in proving the long-term potential for this type of approach. Later, patients will have electrodes implanted in their brains to track their thoughts and control robots.
It's hard to predict how long it will take either of these systems to come to market. If I had to guess, I'd say the eye-tracker will come out sooner because it's cheaper and easier to use - at least for now. But either system would be a godsend to millions of paralyzed people around the world. It will give them a brand new lease on life, a way to take control of their surroundings that today they can only dream about.
About the Author
Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world.
Source: Breakthrough Tech Lets Users Surf the Web With Just Their Eyes:
Michael A. Robinson is one of the top financial analysts working today. His 30-year track record as a leading tech analyst has garnered him rave reviews. The first analyst to uncover the rare earth mineral crisis, he amassed cumulative gains of 990% for his readers in just 16 months. Today he is the editor of Radical Technology Profits. He also edits the Era of Radical Change e-letter that explores "what's next" in the tech investing world.Source: Breakthrough Tech Lets Users Surf the Web With Just Their Eyes:
Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again
By Michael A Robinson
www.moneymorning.com
www.moneymorning.com
Not long ago, the future of Microsoft Corp. (NASDAQ: MSFT) was slipping through its grasp.
Then it introduced Kinect. Today, the tech giant is using Kinect to win big on a breakthrough that will literally touch millions of lives. It is one of the reasons why Microsoft's stock has gained more than 20% this year.
What is Kinect? You may recognize it as the best-selling add-on to the Xbox 360 video game. But it's much more than that. It represents a revolution in how we will communicate with our computers, our TVs, and our smartphones. For Microsoft, Kinect is literally a game changer. They lead the world in the technology behind it, and it promises to be big. But not just for Microsoft...not by a long shot.
But since its introduction in 2010, hackers have found dozens of very cool uses for Kinect-- none of which did much for Microsoft's bottom line. This got the software giant to thinking that maybe they were sitting on a potential gold mine. That's why Microsoft is now tapping the genius of young entrepreneurs (You know, the type of guys who live and breathe cutting-edge high tech) to better monetize the technology behind Kinect.
In fact, Microsoft recently picked 11 startups to work at its Kinect development offices in suburban Seattle. It's a savvy move. After all, these guys get out of bed every day looking to create the Next Big Thing.
Already, the program shows great promise. Here are some of the slick high-tech ideas these young turks are already tackling:
First of all, Microsoft recently released a version of Kinect for Windows and is now pushing a version with developer software.
In fact, I predict we will see hundreds of applications using Kinect by the end of this decade. And many of them will be practical for everyday use.
My gut tells me they will come up with an app that accepts wireless payments as you roll past a digital register. And that's just the start. Turns out Microsoft is working with roughly 300 companies to develop more Kinect uses with Windows.
The list includes big-cap leaders like American Express (NYSE: AXP), Boeing (NYSE: BA) , Mattel (Nasdaq: MAT) , Toyota (Nasdaq: TM) and UnitedHealth Group (NYSE:UNH), to develop Kinect for Windows applications. In the near term, Kinect likely will have its biggest impact on businesses that can make good use of large screens.
But it won't be long before Kinect becomes a mainstay of PCs, smartphones and tablet computers. Let me close by saying it's impossible to predict just how much Microsoft can earn from stand-alone sales of Kinect.
That's going to depend on how many applications emerge and how popular they become with the public.
But this much is clear.
Less than a decade ago, operating a computer with the wave of your hand was the stuff of science fiction - remember the movie Minority Report? Now it's becoming reality. That's what makes Kinect part of the Era of Radical Change, and it won't be long before we find a way for investors to profit from it.
Source: Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again:
Then it introduced Kinect. Today, the tech giant is using Kinect to win big on a breakthrough that will literally touch millions of lives. It is one of the reasons why Microsoft's stock has gained more than 20% this year.
What is Kinect? You may recognize it as the best-selling add-on to the Xbox 360 video game. But it's much more than that. It represents a revolution in how we will communicate with our computers, our TVs, and our smartphones. For Microsoft, Kinect is literally a game changer. They lead the world in the technology behind it, and it promises to be big. But not just for Microsoft...not by a long shot.
The Promise Behind Microsoft Kinect
The magic behind Kinect is that it responds to body gestures. And while Kinect did debut to rave reviews, Microsoft executives really didn't understand how Kinect could change the world -- and rack up new sales.But since its introduction in 2010, hackers have found dozens of very cool uses for Kinect-- none of which did much for Microsoft's bottom line. This got the software giant to thinking that maybe they were sitting on a potential gold mine. That's why Microsoft is now tapping the genius of young entrepreneurs (You know, the type of guys who live and breathe cutting-edge high tech) to better monetize the technology behind Kinect.
In fact, Microsoft recently picked 11 startups to work at its Kinect development offices in suburban Seattle. It's a savvy move. After all, these guys get out of bed every day looking to create the Next Big Thing.
Already, the program shows great promise. Here are some of the slick high-tech ideas these young turks are already tackling:
- Styku only hopes to reinvent how people shop online. The startup's idea is to provide you with a personal avatar that lets you "try on" clothes virtually before you buy them.
- Jintronix uses Kinect and 3D gaming to improve rehabilitative therapies for patients suffering from a motor disability. Virtual reality could be a godsend for stroke victims who want to rehabilitate from their homes.
- GestSure Technologies targets surgeons and hospitals. It wants to bring touchless interfaces into the operating room. Doctors could access computer data during surgery without compromising cleanliness.
- Ikkos uses algorithms to teach movements. Parents will love this one. It's designed to help people develop the body mechanics of an Olympian.
First of all, Microsoft recently released a version of Kinect for Windows and is now pushing a version with developer software.
In fact, I predict we will see hundreds of applications using Kinect by the end of this decade. And many of them will be practical for everyday use.
"Kinected" Carts Follow Shoppers
Take the case of Whole Foods Market Inc. (NASDAQ: WFM). The upscale food store is working on a smart shopping cart equipped with Kinect. How cool is this? The Kinect cart can automatically follow a shopper through the store. Not only that, it can import a shopping list. But it gets better -- the system can direct a customer to items on store shelves. It can even scan goods as they are placed in the cart.My gut tells me they will come up with an app that accepts wireless payments as you roll past a digital register. And that's just the start. Turns out Microsoft is working with roughly 300 companies to develop more Kinect uses with Windows.
The list includes big-cap leaders like American Express (NYSE: AXP), Boeing (NYSE: BA) , Mattel (Nasdaq: MAT) , Toyota (Nasdaq: TM) and UnitedHealth Group (NYSE:UNH), to develop Kinect for Windows applications. In the near term, Kinect likely will have its biggest impact on businesses that can make good use of large screens.
But it won't be long before Kinect becomes a mainstay of PCs, smartphones and tablet computers. Let me close by saying it's impossible to predict just how much Microsoft can earn from stand-alone sales of Kinect.
That's going to depend on how many applications emerge and how popular they become with the public.
But this much is clear.
Less than a decade ago, operating a computer with the wave of your hand was the stuff of science fiction - remember the movie Minority Report? Now it's becoming reality. That's what makes Kinect part of the Era of Radical Change, and it won't be long before we find a way for investors to profit from it.
Source: Microsoft Corp. (Nasdaq: MSFT) Revived by New Tech Breakthrough: Here's Why MSFT Is (Finally) a "Buy" Again:
Tuesday, July 3, 2012
8 Reasons to Sell Microsoft (Nasdaq:MSFT) and Dump Steve Ballmer
July 3, 2012
By Keith Fitzgerald
www.moneymorning.com
Those who weren't acting in the best interests of their shareholders and maximizing their investments had no place in her portfolio.
Nor mine...which is why I don't own Microsoft today and haven't for years.
Further Reading...
Mimi's sage advice has appeared in Keith's columns before. In this article, she reasoned that when an investment or a trend began making the rounds over drinks, it was time to move on. In fact, she used to call it the "country club" test.
Mimi was also mentioned in Keith's 2009 book entitled: Fiscal Hangover: How to Profit From the New Global Economy
By Keith Fitzgerald
www.moneymorning.com
One day in 1983, my dad asked me a question over dinner after a long day at work.
He wanted to know what I knew about a little computer company called Microsoft. It was the brainchild of the son of one of his partners at Bogle & Gates, William H. Gates, Sr.
"Not much," I replied.
But I did tell my dad that I loved using MS-DOS in the computer lab with my friends. I was a card-carrying member of the nerd herd back in the day, so I spent a lot of time there and knew Microsoft's fledgling PC-based software pretty well.
My grandmother Mimi, though, had a different point of view. You've heard me mention her before.
She's the one who was widowed at an early age and became a savvy global investor long before people ever thought to look at the bigger picture.
Mimi didn't care that the buzz was about the MS-DOS language or even about computers. Having grown up in the Depression, she believed that what people would do with the technology was far more valuable.
She said she had confidence that Sr.'s son, Bill Gates Jr., understood this -- which is why she invested heavily in the Microsoft IPO in 1986. Enough said.
Today, though, I think she'd voice an equally strong opinion about Microsoft (Nasdaq: MSFT) CEO Steve Ballmer. In fact, I think she'd fire him. Here's why...
He wanted to know what I knew about a little computer company called Microsoft. It was the brainchild of the son of one of his partners at Bogle & Gates, William H. Gates, Sr.
"Not much," I replied.
But I did tell my dad that I loved using MS-DOS in the computer lab with my friends. I was a card-carrying member of the nerd herd back in the day, so I spent a lot of time there and knew Microsoft's fledgling PC-based software pretty well.
My grandmother Mimi, though, had a different point of view. You've heard me mention her before.
She's the one who was widowed at an early age and became a savvy global investor long before people ever thought to look at the bigger picture.
Mimi didn't care that the buzz was about the MS-DOS language or even about computers. Having grown up in the Depression, she believed that what people would do with the technology was far more valuable.
She said she had confidence that Sr.'s son, Bill Gates Jr., understood this -- which is why she invested heavily in the Microsoft IPO in 1986. Enough said.
Today, though, I think she'd voice an equally strong opinion about Microsoft (Nasdaq: MSFT) CEO Steve Ballmer. In fact, I think she'd fire him. Here's why...
8 Reasons Why Steve Ballmer Must Go
- Ballmer took over Microsoft 12 years ago when the stock was about $60. Now it struggles to maintain $30. Microsoft has $58.16 billion in cash and this is the best Steve Ballmer can do?
- Office and Windows are dying. Once the business world's de facto standard, both are being replaced by cheap, easy-to-operate software, much of which is actually free as well as compatible. This is a big problem considering that, according to the Wall Street Journal, roughly 85% of Microsoft's revenue is coming from just two products: Windows and Office.
- The company isn't innovating fast enough or aggressively enough. What's more, it's attempting to compensate for its own shortcomings with increasingly ill-conceived acquisitions. For instance, Microsoft forked over $605 million for 18% of the Barnes and Noble Nook e-reader and still has no real ability to compete with Amazon's Kindle. It also couldn't seal the deal with Yahoo. Despite a sizable head start using Yahoo's core search technology, Bing has a mere 15% of the search market today. Ballmer waited nearly four years to respond to the iPad and his "Surface" tablet was ho-hum when it could have been jaw dropping. One more: Microsoft paid $8.5 billion in cash for Skype. Apparently the fact that Skype was not profitable didn't matter. Ballmer's track record suggests to me that he buys businesses that nobody else "must have."
- Microsoft's Internet offerings remain wannabes and are highly priced at that. Take Yammer. Microsoft just paid $1.2 billion through the nose to acquire a company that was valued at $600 million last fall when it raised $85 million in a venture offering. Team Ballmer plans to integrate it into Office on the assumption that somehow the Microsoft marriage will endear the brand to customers anxious to socialize business. I think they're delusional. Most Microsoft users I know, including myself, are actively planning to move away from the legacy software we've used for years the first instant we can in favor of software we actually like to use!
- Microsoft spent $26 billion on research over the last three years. Meanwhile, Apple spent $5.54 billion and managed to crank out products light years better than anything Microsoft has come up with. No question which group of shareholders is getting the most bang for the buck.
- Windows 8 is a wreck. Versions I have played with are so unintuitive as to defy belief. There is neither a Control Panel nor a Start menu. It seems to me that very few people actually love their Windows anymore the way Apple users love their Mac OS.
- Ballmer can't do a product launch without jumping around the stage like a Planet of the Apes extra according to Joel Hruska of ExtremeTech. No doubt an apt description if you've ever seen him do his thing-- albeit not a very flattering one. That's a problem. Ballmer doesn't appear to do anything without appearing sweaty and uncomposed. His competitors look calm, cool and collected. The late Steve Jobs wrote the book on creating real excitement for users, not just inwardly-focused developers who give birth to successive generations of questionable products. Who would you trust is the question posed at the end of this video. Not a tough call in my mind.
- Spellbound nerds, once the company's backbone, appear to be an endangered species. If you want to see the future, look at what teens are using and writing. Apple now allows teens as young as 13 to participate in its developer's conference, where thousands of people learn about upcoming offerings (and help take the company to new heights).
Those who weren't acting in the best interests of their shareholders and maximizing their investments had no place in her portfolio.
Nor mine...which is why I don't own Microsoft today and haven't for years.
Further Reading...
Mimi's sage advice has appeared in Keith's columns before. In this article, she reasoned that when an investment or a trend began making the rounds over drinks, it was time to move on. In fact, she used to call it the "country club" test.
Mimi was also mentioned in Keith's 2009 book entitled: Fiscal Hangover: How to Profit From the New Global Economy
About the Author
Keith Fitz-Gerald has been the Money Morning team Chief Investment Strategist since 2008. He’s a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to being editor of the Money Map Report, Keith runs The Geiger Index, a reliable, emotion-free guide to making big money and avoiding losses, and the Strike Force service, which aims to get in, target gains, and get out clean. Learn more about Keith on our contributors page.
Source: 8 Reasons Why Mimi Would Sell Microsoft (Nasdaq:MSFT) and Dump Steve Ballmer:Keith Fitz-Gerald has been the Money Morning team Chief Investment Strategist since 2008. He’s a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to being editor of the Money Map Report, Keith runs The Geiger Index, a reliable, emotion-free guide to making big money and avoiding losses, and the Strike Force service, which aims to get in, target gains, and get out clean. Learn more about Keith on our contributors page.
Tuesday, April 17, 2012
Tech Sector ETFs: Perfect for Investors
Despite the recent selloff, shares of Apple Inc. (NASDAQ: AAPL) have skyrocketed 48% in the first quarter, dwarfing the 12% gain posted by the S&P 500.
Apple's astonishing rise has also helped to underpin the Nasdaq Composite, which gained nearly 19% in the first quarter -- its strongest showing since 1991. But that's not the only place to experience the "Apple Effect." Many investors who own technology ETFs -- which hold almost 4% of all Apple shares outstanding -- were rewarded with even better returns.
For instance, theVanguard Information Technology ETF (NYSE: VGT) was up 20.85% in the first quarter. Even better, the iShares Dow Jones U.S. Technology Index Fund (NYSE: IYW), was up 21.77%, thanks in part to Apple. Now the question is: Can Apple's momentum continue to drive technology ETFs higher?
Apple's astonishing rise has also helped to underpin the Nasdaq Composite, which gained nearly 19% in the first quarter -- its strongest showing since 1991. But that's not the only place to experience the "Apple Effect." Many investors who own technology ETFs -- which hold almost 4% of all Apple shares outstanding -- were rewarded with even better returns.
For instance, theVanguard Information Technology ETF (NYSE: VGT) was up 20.85% in the first quarter. Even better, the iShares Dow Jones U.S. Technology Index Fund (NYSE: IYW), was up 21.77%, thanks in part to Apple. Now the question is: Can Apple's momentum continue to drive technology ETFs higher?
Is Apple Inc. (NASDAQ: AAPL) Too Big?
Apple, the world's largest company with a market cap closing in on $600 billion, has grown so large that the stock accounts for almost 20% of some of the ETFs tracking the technology sector. For example, Apple represents 18.7% of the Select Sector Technology SPDR (NYSE:XLK), which holds about $9.8 billion in assets overall.Some analysts are warning that tying your fate so heavily to one investment could be extremely hazardous to your financial health. "This astonishing public valuation has had some unexpected effects...chief among them is the risk of overconcentration, as a great many indices and the ETFs that track them are weighted by market cap," said Dave Fry at ETF Digest.
In fact, many investors are concerned that Apple's amazing performance is pushing the whole market up.
According to data compiled by Bloomberg News, the Cupertino, CA-based company has surged 653% since March 9, 2009, accounting for 8% of the S&P's 103% surge.
Humming Along Without Apple Inc.
But while Apple's influence is one of the largest ever by a single stock, the broader market would still be humming right along without it. Fact is, the S&P 500 would have nearly doubled even without Apple. And even if the tech giant's meteoric first quarter rise is excluded, the S&P still would have jumped by 10.4%, its best start since 1998, according to Bloomberg."The rally has been much more than Apple," said Howard Ward, a money manager at Gamco Investors Inc. who helps oversee $36 billion, told Bloomberg. "Apple no doubt has added some sparkle to the technology sector, but all market sectors have risen." Although it's viewed somewhat differently, the surge in tech stocks in 2012 may remind some investors of the dot.com boom, when the technology sector also led the whole market higher. Mobile computing is everywhere. Cloud computing, text messaging and social media dominate the landscape.
But this tech boom isn't being led by the Internet stocks that left baby-boomers holding the bag at the turn of the millennium. After Apple, the top 10 holdings for the four biggest ETFs include household names like Microsoft Inc. (NASDAQ: MSFT), Intel Corp. (NASDAQ: INTC), and International Business Machines Corp. (NYSE: IBM).
All are surging on the strength of new spending by corporations rebounding from the recent financial meltdown. "Tech firms had come out of this recession enjoying double-digit growth in technology investments from corporations...there are still reasons to be confident about longer-term trends favoring tech firms," according to analyst Robert Goldsborough of Morningstar.
Technology ETFs: Perfect for Investors
A large weighting of one stock in an ETF, such as Apple, isn't good or bad, it's just important to know.Besides giving you an efficient way to get quick, broad exposure to the sector, ETFs are especially suited to the technology market. They are easy to trade and you don't have to pin all your hopes on one stock, even if Apple is a large part of the portfolio.
One thing to think about is whether you want to own Apple itself -- or the entire sector with a dose of Apple. Matthew Hougan, President of ETF Analytics, says investors who are thinking about using ETFs to play the technology boom should ask themselves what they are really buying into. "Is it the technology renaissance? The mobile device boom? Or Apple's specific creativity, brand and ability to execute?" asked Hougan.
If the answer is yes to one of the first two, ETFs are a good way to play it. However, if it's just a yes to the last question, then just buy Apple stock itself, Hougan says. But with or without Apple, technology ETFs are likely headed higher.
Source: http://moneymorning.com/2012/04/17/will-apple-inc-nasdaq-aapl-keep-driving-technology-etfs-higher/
Friday, April 13, 2012
What the Google Stock Split means for Investors
Google Inc. (NASDAQ: GOOG)
reported first-quarter earnings after the close yesterday (Thursday)
and the Internet search giant did not disappoint - and also delivered a
surprising stock split announcement. First quarter profits at the Mountain View, CA-based company soared 61%
to $2.89 billion, or $8.75 a share, up from $1.8 billion or $5.51 a
share a year ago. Excluding stock-based compensation, profit rose to
$10.08 from $8.08 a share. Total revenue was up 24% to roughly $8.14
billion.
Analysts had anticipated earnings of $9.65 a share and revenue of $8.15 billion, according to Thomas Reuters. While the numbers were a little light, the company appeased investors with an upbeat outlook going forward. Google also made an unexpected move: a two-for-one stock split.
Analysts had anticipated earnings of $9.65 a share and revenue of $8.15 billion, according to Thomas Reuters. While the numbers were a little light, the company appeased investors with an upbeat outlook going forward. Google also made an unexpected move: a two-for-one stock split.
Google's Stock Split
Shares rose a tepid 1.1% after hours as the company divulged plans to create a new class of non-voting capital stock, which will be traded on the Nasdaq.
A stock split increases the number of outstanding shares, while leaving
the total dollar value of the shares the same, because no real value
has been added as a result of the split. In a two-for-one split, each
shareholder receives one additional share for every share owned. A
company will often split its stock when the share price has risen so
high, many investors find the shares too expensive to buy.
Google's "tricky" stock spilt actually gives the company's founders and
main shareholders, CEO Larry Page, Chairman Eric Schmidt, and
co-founder Sergey Brin, more clout in the company with the maneuver.
The new split shares will not have any voting rights, and don't allow
shareholders to vote on key issues such as corporate policy and members
of the board.
Google already has a dual-class share system. That gives the three founders' stock 10 votes per share, or 66% of the voting power. Industry analysts shared a mix reaction to the move, questioning its benefit for GOOG shareholders.
"What's odd is that we don't believe there was any real demand for this move by institutional shareholders," Citigroup's Mark Mahaney wrote to shareholders. "The positive spin is that the details imply a long-term commitment to the company by the Founders. The negative spin is that the details help ensure that future employee stock/option grants and stock-based acquisitions won't dilute the Founders. It's good to be Founder... A real shareholder wealth creation step would be the paying of a dividend. But we don't expect to see one for several years..."
Mahaney reiterated his "Buy" rating on the stock with a $750 price target, a 15% premium to Thursday's $651.01 closing price. Google didn't disclose a date for the split. It first plans to file papers next week with the U.S. Securities and Exchange Commission. Shareholders will vote on the split at the annual meeting June 21 - and since the three founders hold the majority of voting power, the measure should be approved.
Google already has a dual-class share system. That gives the three founders' stock 10 votes per share, or 66% of the voting power. Industry analysts shared a mix reaction to the move, questioning its benefit for GOOG shareholders.
"What's odd is that we don't believe there was any real demand for this move by institutional shareholders," Citigroup's Mark Mahaney wrote to shareholders. "The positive spin is that the details imply a long-term commitment to the company by the Founders. The negative spin is that the details help ensure that future employee stock/option grants and stock-based acquisitions won't dilute the Founders. It's good to be Founder... A real shareholder wealth creation step would be the paying of a dividend. But we don't expect to see one for several years..."
Mahaney reiterated his "Buy" rating on the stock with a $750 price target, a 15% premium to Thursday's $651.01 closing price. Google didn't disclose a date for the split. It first plans to file papers next week with the U.S. Securities and Exchange Commission. Shareholders will vote on the split at the annual meeting June 21 - and since the three founders hold the majority of voting power, the measure should be approved.
GOOG Pleases with Future Prospects
The company was buoyant about the numbers and animated about its prospects for the future. "We also saw tremendous momentum from the big bets we've made in products like Android, Chrome and YouTube," CEO Page said in a statement. "We are still at the very early stages of what technology can do to improve people's lives and we have enormous opportunities head. It is a very exciting time to be at Google."Currently Google has the leading market share of search advertisements, and aims to keep it that way. The company also continues to grow in areas outside its traditional search business, making it a dominant force to be reckoned with against established and viable competitors in the mobile, social networking and online video markets. What held GOOG's share price in check following the release was the disclosure that while the number of clicks on Google increased, the amount of advertisers paid per click fell. Paid clicks are a measure of how frequently consumers click on Google's ads.
U.S. paid clicks rose 39% from a year ago and 7% from the prior quarter. But the average cost that advertisers paid Google per click fell 12% during the same period and dropped 6% from the last quarter. Several analysts last quarter cringed at the falling costs per clicks, and Google assured then that more competitive pricing would lead to more clicks. Google was true to its word; click growth came in at double the rate of growth a year earlier.
Surprisingly, the company did not mention its growing social network site Google+, nor did it discuss its pending acquisition of Motorola Mobility Holdings Inc. (NYSE: MMI). According to data from Thomson/First Call, the analysts' mean recommendation on GOOG is a "Buy," with a median target price of $725.
Google stock was down 3.36% to $629.14 Friday by 11:30 a.m. EDT.
Sunday, April 8, 2012
Time to Buy Oracle Corp
Today marks my 117th and final article at Money Morning.
Viewed as a portfolio, I'm proud that those 117 calls are up on average. Before we get into my take on Oracle Corp (NASDAQ: ORCL) I'd like to take a look back over years. The 2010 picks have held up nicely with 12 positive and just six negative, for a 10 percent positive return on average, as of this writing.
The hot long ideas of 2011 turned out to be El Paso (NYSE: EP) and Sturm, Ruger & Co. (NYSE: RGR). El Paso is up 48% while Ruger is up 78%.
So far in 2012 the column's best sell idea, Petrobras (NYSE ADR: PBR), has dropped 15% since January 24. Our Jan. 30 "Buy" recommendation on Apple (NASDAQ: AAPL) is up 32%. It's been a great run and my thanks again to the entire Money Morning staff for the opportunity.
Viewed as a portfolio, I'm proud that those 117 calls are up on average. Before we get into my take on Oracle Corp (NASDAQ: ORCL) I'd like to take a look back over years. The 2010 picks have held up nicely with 12 positive and just six negative, for a 10 percent positive return on average, as of this writing.
The hot long ideas of 2011 turned out to be El Paso (NYSE: EP) and Sturm, Ruger & Co. (NYSE: RGR). El Paso is up 48% while Ruger is up 78%.
So far in 2012 the column's best sell idea, Petrobras (NYSE ADR: PBR), has dropped 15% since January 24. Our Jan. 30 "Buy" recommendation on Apple (NASDAQ: AAPL) is up 32%. It's been a great run and my thanks again to the entire Money Morning staff for the opportunity.
Now, let's talk about the one company that Buy, Sell or Hold has
not covered yet but I believe is deserving of the column's final
recommendation: Oracle Corp (NASDAQ: ORCL).
Time to Buy Oracle Corp. (NASDAQ: ORCL.)
Oracle is the last of the giant cash cows in the tech sector. Oracle not only has a giant moat around its operations, it's also at one of the safest points in the growth curve. The company has a nice net cash buffer compared to its issued debt and has grown its net operating cash flows each year since 2007. The company reported $9.7 billion in free cash flow in 2011.That why I think now is the time to buy Oracle Corp. (**)
You see, Oracle Corp.:
- Has started paying a dividend.
- Has net cash and net cash flow.
- And has a high install base.
Specifically, Oracle reported 2011 net income growth of 39%, sales or revenue over $35 billion with growth in sales or revenue up 32%, while EBITDA has grown to over $15 billion. This has happened in an environment that has seen the company increase its metrics pretty much across the board during the great recession. It has a huge pile of net cash and net cash flow. However, a large change has happened with Oracle.
The company has embraced the process of rewarding its long-term shareholders with a cash yield on its common shares. The company also enjoys a massive install base and a sticky one at that. It's unlikely that anyone will soon develop a competing product that could hinder Oracle's future prospects. With that in mind, here's how to position yourself in Oracle Corp.
Action to Take: Buy Oracle Corp. (NASDAQ: ORCL) (**)
Oracle is one of the largest, most liquid stocks on the planet. We are able to purchase our exposure without regard to liquidity issues that crop up in small stocks.
Let's look to purchase 50% now at market, and look for a 5% or so pullback to pick up the last 50%. The company now pays a dividend rate that is expected to climb over time. However, you can increase that cash yield on these shares by using a covered call strategy.
Oracle is one of the safest companies an investor can purchase shares in. It is in the same class as Microsoft, Intel, IBM, Google and Apple. It is worthy of a Buy at these prices in today's world of sovereign risk.
(**) Special Note of Disclosure: Jack Barnes has no interest in Oracle Corp. (NASDAQ: ORCL).
Oracle is one of the largest, most liquid stocks on the planet. We are able to purchase our exposure without regard to liquidity issues that crop up in small stocks.
Let's look to purchase 50% now at market, and look for a 5% or so pullback to pick up the last 50%. The company now pays a dividend rate that is expected to climb over time. However, you can increase that cash yield on these shares by using a covered call strategy.
Oracle is one of the safest companies an investor can purchase shares in. It is in the same class as Microsoft, Intel, IBM, Google and Apple. It is worthy of a Buy at these prices in today's world of sovereign risk.
(**) Special Note of Disclosure: Jack Barnes has no interest in Oracle Corp. (NASDAQ: ORCL).
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