Wall Street to Main Street – News, Views & Commentary – Apr 10, 2006
It’s Monday, April 10, 2006, and this weekend Tiger Woods failed to get another green jacket when he came in three shots behind Phil Mickelson, so last year’s champion became this year’s host when Woods graciously put the green jacket on Mickelson.
Earnings season is here again, featured companies ready to report today are Alcoa, Inc (NYSE: AA) has a conference call scheduled for 5 pm today to discuss earnings, Abbot Labs (NYSE: ABT) the estimate is $ . 572 compared to EPS of 58 cents a year ago, CKE Restaurants (NYSE: CKR) estimate is $0.178 compared to EPS of 12 cents a year ago, Cascade Corp (NYSE: CAE) estimate is $0.693 at Compared to EPS of 37 cents a year ago, Genetech, Inc (NYSE: DNA) estimate is $0.413 Compared to EPS of 29 cents a year ago, Rite Aid (NYSE: RAD) estimate is $0.024 Compared at EPS of 6 cents a year ago, Shaw Group, Inc (NYSE: SGR) estimate is $0.369 compared to EPS of 15 cents a year ago, Topps Company (NASDAQ: TOPP) estimate is $0.043 compared with a BPA of 1 cent a year ago.
We will list the notable companies that are reporting this week, as their successes and failures may have some effect on their sectors.
the lehman brothers
Now, one of the companies we hold in high regard at NAMC Newswire is Lehman Brothers (NYSE: LEH), the company’s board of directors recently approved a 2-for-1 stock split. The additional shares will be issued as a stock dividend. and will be payable to shareholders of record as of April 18, 2006, will be issued on or about April 28, 2006. This will bring the number of shares outstanding to approximately 538 million. Even after a split, Lehman will still have legacies, as mergers and acquisitions will continue in 2006. This goes for another company we hold in high regard, Goldman Sachs (NYSE: GS), a company that should be trading well over $161.00. .
Our outlook for Lehman Brothers for 2006 is for the stock to trade between $90.00 and $100.00 after the split.
the national show
The US cable industry is gathering this week in Atlanta, Georgia as the National Show kicks off, an event sponsored by the National Cable and Telecommunications Association. Now you would think that only the likes of Time Warner (NYSE: TWX), Comcast Cable (NASDAQ: CMCSA), and Cablevision Systems (NYSE: CVC) would be filing, and you’d be sorely mistaken. It’s not just about cable TV anymore, it’s about triple play, TV, Voice and Internet.
Therefore, phone companies such as Verizon (NYSE: VZ), Sprint Nextel (NYSE: S) and AT&T (NYSE: T) will be represented as cable operators are trying to take market share from them by offering customers of current telephony a one-stop shop. for all your communication needs. But it gets better, Internet companies like Yahoo (NASDAQ: YHOO) and possibly Google (NASDAQ: GOOG) will also be represented there because they are making inroads into other areas like the Internet playing field, Phone and TV come together.
If you are an investor in cable, internet or phone companies then you should be interested in this topic as it will have an effect on the companies in which you own shares. Anger [http://www.thenationalshow.com] .
Hollywood needs to open its eyes
In the evolution of the entertainment industry, the development of new technologies has opened up many new opportunities for growth, but only those companies that stick their heads out of the sand and see digital downloads as the future will benefit.
Mark Cuban, owner of the Dallas Mavericks basketball team and a visionary in his own right, earlier this year tried something that had never been done before and released the movie “Akeelah and the Bee,” starring Angela Bassett and Laurence Fishburne, as a theatrical release and, at the same time, its premiere on cable television as a pay per view. This was the first glimpse of the future of new movie releases.
The hit film “BrokeBack Mountain,” starring Heath Ledger and Jake Gyllenhall, went a step further by simultaneously releasing the film on DVD and digital download. Now you’d think this would be a huge leap for Hollywood, but you’d be wrong. The movie download system they used has limitations as you can only watch them on your computer, you cannot burn them to DVD.
All of this stems from Hollywood’s fear of piracy, but that fear impedes the potential growth of the industry.
Now, let’s take a look at a company that took the bull by the horns and embraced new technology and is reaping the rewards. Privately owned and adult video entertainment leader Vivid Entertainment currently offers its customers the opportunity to download movies from its website and burn them to a DVD that can be played on their DVD player or computer. Once the consumer makes the purchase, he owns that copy and can reproduce it wherever he wants.
They are using an encryption process that only allows buyers to burn the movie to a DVD once and it cannot be copied.
Now, Vivid Entertainment is involved in the adult entertainment business and is a private company, which is why we mention them because of how they approached the digital download market.
Now, let’s talk about a company that would benefit greatly from venturing into this area. The company is Netflix (NASDAQ: NFLX), a leader in online DVD rentals, they are currently in a battle with Blockbuster Video (NYSE: BBI) for trademark infringement and could win, but that’s not the play. They don’t currently offer digital movie downloads, but you can be sure they’re looking into it deeply. Once they can present something to the entertainment industry that shows a comfortable level of protection against piracy, you will see the scope of the entertainment industry change. At that time, consumers can expect to see changes at their local DVD rental stores, digital movie downloads may be available through a kiosk located in the store.
This innovation would eliminate the costly process of producing DVDs and distributing them, which only adds more profit to the bottom line of entertainment companies. We see Netflix as the possible leader in this evolution of entertainment.
Two companies in the DVD rental industry to avoid until they come up with a comprehensive adaptation plan are current leaders in the DVD rental business, Blockbuster and Movie Gallery (NASDAQ: MOVI).
As I repeat this every day, we cannot stress enough that investors should do their due diligence, call the companies, get the information, consult with your investment advisor, and if you don’t have one, consider getting one. Spend as much time researching these companies as when you go shopping for a new TV, it’s just for your protection. When it comes to low-priced stocks, spread out your orders or place a limit order to avoid a spike.
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