It's cool fun sometimes to look at under-$10 stocks and see if there are any worth investing in. TiVo (NASDAQ: TIVO), famous maker of digital-video-recorder technology, is currently trading under $10 a share, and it reported its Q2 numbers on Wednesday. I can't say, though, that I'm ready to buy just yet, even though some of the stats presented in the release described a nice improvement in year-over-year comparisons.
The bottom line, in fact, improved substantially. Earnings per diluted share came in at 3 cents. Last year, TiVo saw a loss of 18 cents per diluted share. According to Earnings.com, analysts were looking for a loss of 2 cents per share during the quarter, so estimates were certainly beat.
Cash flow from operations also jumped in a very nice way. The company generated over $10 million over the last six months. During the similar time period in 2007, TiVo needed to use almost three times that amount to keep operations going. Cash flow is an important metric for investors to look at, so that was good to see.
Amazon.com (NASDAQ: AMZN) has told investors that it may soon start offering textbooks on the Kindle, its $400 e-book reading device. Portfolio'sTech Observer is bullish on the idea:
This may be the move that flings Kindle into the mainstream. If nearly all textbooks wind up on Kindle, then paying $400 for a Kindle would turn into almost a no-brainer decision for college students [...] A single textbook can cost $150 new -- and still maybe $100 or more used [...] If e-book versions cost even 25% less, that's a huge savings ...
I'm less excited: given that most college students don't buy a lot of books for pleasure, this $400 device would be used almost exclusively for textbooks: so you'd have to save a lot of money to make up for that $400 expense. Then there's the fact that the Kindle might not be so convenient for classes that involve flipping back and forth between chapters, appendixes and glossaries.
But the real downfall of the Kindle for textbooks is the fact that a lot of college students sell their books back to the store at the end of the semester, recouping as much as 50% of the cost.
A foray into textbooks will not take Kindle to the next level. It probably won't require a significant enough investment by Amazon to hurt shareholder value but it's definitely not something to get excited about.
Barnes & Noble Inc. (NYSE: BKS) surprised Wall Street today by reporting quarterly earnings that did not suck as bad analysts expected, mainly because it was able to control costs. The question is whether this is sustainable.
Net income at the world's largest bookseller fell to $15.4 million, or 27 cents a share, from $18.05 million, or 26 cents, a year earlier. Sales dropped 1.6% to $1.2 billion from a year earlier when J.K. Rowling's Harry Potter and the Deathly Hallows was flying off the shelves. Barnes & Noble store sales decreased 1.6% to $1.1 billion, with comparable store sales decreasing 4.7%. Barnes & Noble.com sales rose 3.6% to $99.8 million.
Excluding a one-time tax benefit, profit was 15 cents, five cents ahead of the 10-cent average estimate of analysts surveyed by Bloomberg. It was also higher than the company's guidance of 8 cents to 13 cents a share. Gross margins were stronger because of the greater utilization rates of its distribution centers and a lower markdown rate. Selling and administrative expenses fell in the quarter.
Of course, Barnes & Noble will continue to struggle as consumers cut back on their discretionary purchases. Moreover, Amazon.com Inc. (NASDAQ: AMZN) is not going anywhere soon. The company expects to lose 10 to 15 cents in the third quarter. It also lowered its full-year comparable same store sales guidance from "slightly negative to a decrease in the low single digits." The company is maintaining its full-year earnings guidance of $1.70 to $1.90.
At this rate, the company may be able to ride out the economic downturn until it can find a private equity buyer which is about the only hope for shareholders.
Napster (NASDAQ: NAPS), a digital-music-download entity that competes with Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Wal-Mart (NYSE: WMT) and Yahoo! (NASDAQ: YHOO), cued up its Q1 numbers on Monday after the bell. The top line decreased 6% to $30.3 million. The bottom line showed a net loss of 10 cents per diluted share, same as last year's results. In fact, the company lost a dime per share in the previous quarter. Must be something special about that number. Anyway, according to Briefing.com, Napster missed Wall Street estimates by one penny.
Gross margin for the quarter was flat at 27% when comparing to year-over-year data, but it did represent an increase over the 26% gross margin from the previous quarter. That's got to count for something, right? No, it doesn't. Neither does the press release's promotion of the new MP3 initiative. I could care less. Napster is an equity trading at a very low price, it's racking up losses, and it'll never become a serious threat to Apple and the iPod/iTunes empire. A good investment this is not.
The stock was down 10% in yesterday's after-hours session. I'm not sure where it will close in the regular session today, but Napster isn't where I want to be. There are better ideas out there, Apple certainly being one of them. I know that the stock snapshot shows it has been strong in the last month or so, but I'm not inclined to read too much into that in this particular case. For me, it's about stock price (too low) and brand equity (not powerful enough). Apple and iTunes sing a much better song than Napster, in my opinion...
[Editor's note: At 8:12 a.m. NAPS shares traded 2.7% higher]
Disclosure: I don't own any company mentioned; positions can change at any time.
TheStreet.com's Jim Cramer says all that money has to go somewhere, and this is a likely destination.
Clash of the ideals! Oil's down, and what can you buy when there's so much bad bank news? What can you buy when Wachovia (NYSE: WB) (Cramer's Take) is boosting reserves and Morgan Stanley (NYSE: MS)) (Cramer's Take) is still being pursued by authorities and JPMorgan (NYSE: JPM) (Cramer's Take) says July stunk and UBS (NYSE: UBS) (Cramer's Take) is so tarnished that you can't believe it was once the most conservative blue chip out there.
The answer is tech, of course!
Wait a second. Would anyone mind if we actually had a reason to buy tech beyond the Kindle, the device that made Citigroup gaga about Amazon (NASDAQ: AMZN) (Cramer's Take) -- not that you needed a device to do that.
Sure, we have pre-seasonality. Remember, you are supposed to buy tech at the end of the summer, not that anyone waits that long.
Today was a volatile day in the markets as stocks started out flat to slightly positive early on, went negative, but then came back throughout the day. Traders had no real economic numbers, but oil trading under $115 and gold down another 3% has traders cheering beyond any lagging economic numbers.
Amazon.com Inc. (NASDAQ: AMZN) rose sharply in today's final minutes. An analyst at Citigroup noted that the company could sell as many as 380,000 units of its Kindle e-book reader this year, which could in turn increase its Audible subscriptions and could raise its e-book sales. Shares were up over 9% at $87.86 in today's final minutes.
For the most part, the IPO market has been horrible this year. In fact, according to a report from Reuters, only three IT (information technology) companies have gone public this year.
Despite this, web-hosting company Rackspace (NYSE: RAX) still went ahead with its IPO this week. And, it was pretty bad for investors. On its opening day, the stock price plunged 20% to $10. Ironically enough, Wall Street was hoping that the Rackspace deal would help spark the IPO market.
After all, Rackspace is a great company. Keep in mind that its investor roster includes biggies like Norwest Venture Partners and Sequoia Capital.
Moreover, unlike other upstart tech IPOs, Rackspace has a strong history of profitability. In Q1, net income was $5.4 million. Rackspace is also growing at a torrid pace, with Q1 revenues at $119.6 million, up from $75.2 million in the same period a year ago. There are 33,000 customers.
However, Rackspace must deal with tough competitors, such as IBM (NYSE: IBM), AT&T (NYSE: T) and even Amazon.com (NASDAQ: AMZN), which offers a variety of cloud-computing services. Furthermore, the slowing economy may put pressure on IT budgets, which could be a problem for Rackspace going forward.
The Wall Street Journalreports (subscription required) of upcoming releases this summer such as Andrew Davidson's The Gargoyle, New York Times reporter David Carr's memoir The Night of the Gun, and Ron Suskind's The Way of the World: A Story of Truth and Hope in an Age of Extremism.
There's a separate article on the release of Stephenie Meyer's book Breaking Dawn, which The Journal calls a "vampire romance novel." Borders Group (NYSE: BGP) said it has sold 250,000 copies in the first 24 hours following the book's release.
That's an impressive number, and it may be some cause for hope for shareholders who have taken a beating in booksellers like Borders, Barnes and Noble (NYSE: BKS) and Books-a-Million (NASDAQ: BAMM).
But don't get too excited. Since the first American edition of the first Harry Potter book in October of 1998, shares of Scholastic (NASDAQ: SCHL), a specialty publisher of children's books, have gone from around $20 per share to their current price of $26 -- a gain of 30% over the course of a decade. Not exactly something to get excited about, especially considering it's one of the bestselling books of all time, ever.
The bookstores might get a temporary jolt from late sumer and fall hits, but the long-term fundamentals of the industry will drive results. A new CD from Eminem -- or even The Beatles for that matter -- wouldn't be enough to save a company like Trans World Entertainment (NASDAQ: TWMC). For bookstores, that means the lower prices and wider selection of Amazon.com (NASDAQ: AMZN), or conveniences of stores like Wal-Mart (NYSE: WMT), as well as the onset of digital delivery are the factors investors have to look at.
And even vampire romance novels can't compete with those.
In an effort to increase its market-share in the used and rare book market, Amazon.com, Inc. (NASDAQ: AMZN) has acquired AbeBooks, a leading online marketplace for independent book dealers.
The terms of the deal were not disclosed but, in a press release, Amazon said that "AbeBooks will continue to function as a stand-alone operation based in Victoria, British Columbia."
It's hard to know what to make of this deal without knowing the terms or having any information on AbeBooks' finances but it seems like a good strategic fit. Amazon is the internet leader in new and used books and, by adding Abe, they'll also be the leader in rare books too.
It'll be interesting to see what kind of presence they give Abe on the Amazon site because the two sites are direct competitors for the business of used book dealers and buyers -- the obvious thing to do would be to transport all of Abe's listings so they show up on Amazon too under "used" but that could annoy sellers by making the market more competitive.
U.S. stock futures are higher Wednesday morning, a day after markets rallied around 2.4% due to declining oil prices. But today, ADP monthly employment data will be released, as well as weekly oil inventories data. Investors will digest the numbers and the slew of earnings due for release.
Already reported this morning (to name a few):
Comcast (NASDAQ: CMCSA) said its second-quarter profit rose 8% as cable TV rates rose and consumers ordered more digital and premium services. While the results fell short of Wall Street's forecast, CMCSA shares are trading mildly higher.
Arcelor Mittal (NYSE: MT) said its second-quarter profit more than doubled due to increased production and higher steel prices. It also gave an upbeat outlook for third quarter. The company outperformed consensus by about 20% at the revenue. MT shares, which have already close 7% higher Tuesday, are trading up another 6% in premarket action.
Garmin (NASDAQ: GRMN) shares are crashing, trading 11% lower in premarket action after the company reported quarterly profit that was above market estimates, but revenue missed expectations and 2008 outlook was cut due to macroeconomic conditions and high fuel prices that have already impacted growth.
Office Depot (NYSE: ODP) shares are over 1.7% lower in premarket trading after reporting a second-quarter loss as declining spending by smaller businesses and retail customers hurt sales.
Siemens (NYSE: SI) reported that "third quarter net profit fell 31% due to a one-time gain a year earlier, but order intake and revenue rose, beating expectations and showing the industrial conglomerate's resilience so far to the economic downturn." SI shares are 3.9% higher in premarket trading.
Corning (NYSE: GLW) shares are down over 2% in premarket trading after reporting inline earnings per share, but revenue slightly below estimates.
IAC/InterActive (NASDAQ: IACI) said it swung to a second-quarter loss, hurt by a $300 million charge in its Cornerstone Brands business. Adjusted earnings were 35 cents per share as revenue rose 7% to $1.6 billion. Analysts polled by Thomson Financial expected profit of 31 cents per share on $1.6 billion in sales.
When it comes to companies lacking in any kind of strategic direction, it's hard to top Border Group (NYSE: BGP). In the midst of its efforts to sell itself, Borders recently launched its own e-commerce site to compete with better-financed, and just plain better, rivals like Amazon.com (NASDAQ: AMZN) and Barnes and Noble (NYSE: BKS).
Browsing NewYorkTimes.com this morning, I noticed a banner ad for "the new Borders.com: Free shipping on orders over $25."
Man, that should do a lot to lure customers away from Amazon and Barnes & Noble. Oh, wait. No it won't, because both of those sites offer exactly the same deal. And, just to add insult to injury, so does Books-A-Million (NASDAQ: BAMM).
Basically, Borders has a weak balance sheet and, in the midst of its efforts to put its shareholders out of their misery with a sale, is blowing money on capital expenditures that will give the company the same service as competitors: meaning that most strategic buyers won't pay any extra for the e-commerce site.
The stock's low price has attracted brilliant investors like William Ackman, but given that the company is continuing to make value-destroying decisions, I don't think it's a stock investors should go near.
If you were getting used to the bulls running the show, the bears whispers of "Remember us?" turned much louder today. If you were looking for the day we finally got profit taking after a monster rise in financial stocks, it came. Weak housing data was said to be one of the key issues for the market, but the more than 400,000 weekly jobless claims filed was much worse than expected. Oil didn't skyrocket but it did at least catch a bid today and oil was back up to over $125.00 per barrel late in the day. If you want a big figure, PIMCO's Bill Gross said that total financial writedowns could see $1 Trillion.
Amazon.com, Inc. (NASDAQ: AMZN) saw a mega-surge after the market decided that its above estimate earnings and somewhat conservative guidance was to match the environment rather than to be any red flag. Shares were up a sharp in today's final minutes.
Stock futures were mixed Thursday morning, indicating a similar start to U.S. stocks. While the S&P 500 showed weakness ahead of housing data to be released at 10:00 a.m. EDT, the Nasdaq composite was slightly positive after Amazon.com reported strong earnings Wednesday. Investors also braced for Ford's earnings, which indeed posted double the estimated loss. The earnings wave continues. Meanwhile, oil prices edged a little higher, but remained around $124 a barrel.
Starting with Ford (NYSE: F) then, the world's third largest automaker posted (after items) a loss of $1.38 billion, or 62 cents. Analysts surveyed by Bloomberg expected Ford to report a loss of 28 cents a share. The headlines scream of a loss of $8.7 billion though, which includes $8 billion in pretax writedowns of North American plants and assets of Ford Motor Credit Co. Ford also said it will convert three truck factories to produce small cars as rising gasoline prices sap U.S. truck sales. Dow Chemical (NYSE: DOW) couldn't manage to offset higher costs of energy and raw materials with the recent price increases it announced, and posted a 27% decrease in profit for the period. Net income was $762 million, or 81 cents a share. Revenue is up 23% to $16.38 billion. Earnings were below analyst expectation according to Thomson Financial of 85 cents per share, but better than the sales estimates of $14.9 billion. DOW shares are dropping some 9.5% in premarket trading as the company said it expects the economy to weaken.
Amazon.com Inc. (NASDAQ: AMZN) posted strong earnings Wednesday after the close, proving its growth days aren't over in this weakened economy hurt by high gas prices. Not only did it beat estimates -- with a 41% climb in revenue to $4.06 billion compared to $3.96 expected, and EPS of 37 cents compared to expectations of 26 cents -- but it also raised its full-year revenue projections. AMZN shares are climbing about 6.5% in premarket trading.
'Natural male enhancement' founder gets enhanced prison sentence
Mobile Telesystems (MBT) soars on $452M buyback plan
Could Sprint dump Nextel to join with T-Mobile?
Ford (F) desperately needs more dealers to consolidate
Analyst calls: BT, JAS, EGN, CHL, KO, GILD, DWA ...
Oil broke $120 again as Gustav eyes the Gulf of Mexico
Toyota (TM) takes its 2009 forecasts down
Is TiVo a buy after its Q2 report?
Starbucks (SBUX) management: No raises next year
Before the bell: Stocks flat; TIF, FNM, TIVO, AAPL, GILD, JAS ...
Has housing bottomed? Mortgage data lifts Toll Brothers (TOL), others
Google unveils Ad Manager system for use by anyone
Wal-Mart has high hopes for Marketside format
Mattel to get up to $100 million in Bratz case
Alabama county mulls bankruptcy; could be largest failure in history
It's cool fun sometimes to look at under-$10 stocks and see if there are any worth investing in. TiVo (NASDAQ: TIVO), famous maker of digital-video-recorder technology, is currently trading under $10 a share, and it reported its Q2 numbers on Wednesday. I can't say, though, that I'm ready to buy just yet, even though some of the stats presented in the release described a nice improvement in year-over-year comparisons. 
Today was a volatile day in the markets as stocks started out flat to slightly positive early on, went negative, but then came back throughout the day. Traders had no real economic numbers, but oil trading under $115 and gold down another 3% has traders cheering beyond any lagging economic numbers. 
For the most part, the IPO market has been horrible this year. In fact, according to a 
and 
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In an effort to increase its market-share in the used and rare book market, 
When it comes to companies lacking in any kind of strategic direction, it's hard to top 
Here are some highlights from this past week's 
Stock futures were mixed Thursday morning, indicating a similar start to U.S. stocks. While the S&P 500 showed weakness ahead of housing data to be released at 10:00 a.m. EDT, the Nasdaq composite was slightly positive after Amazon.com reported strong earnings Wednesday. Investors also braced for Ford's earnings, which indeed posted double the estimated loss. The