With 'free WiFi' tied to your cable contract, is wireless access still a public service, or a private utility?
Four years ago, I was stuck in Chengdu, China, facing numerous deadlines back in the United States.
My solution was to turn on my computer's WiFi router, look for open connections among my new Chinese neighbors and piggy-back on them.
It worked. My copy made it to where it needed to go. I even wrote a story about it. I suggested that a "side-band" could separate the bits a subscriber was using from those the public could access, and the router could firewall a subscriber's computer from those radio signals. Voila -- free universal access to the Internet!
Comcast (CMCSA) is now doing something like that, but without the free part.
This little-known company is on the cusp of a sustained uptrend. Tech investors should consider buying the stock at present levels.
Popular with cord cutters, Hulu lets people to watch network TV shows over the Internet. Depending on which suitor acquires the service, its business model could be changing.
Chris Ciaccia, TheStreet
Hulu has become a hot property in recent weeks, as multiple bids have come in for the company, including one from Internet portal Yahoo! (YHOO). Now, AT&T (T) is reported to have thrown its hat in the ring.
The Wall Street Journal's AllThingsD blog reports that AT&T is interested in joining The Chernin Group in a bid for the streaming-video service. Other potential buyers include DirectTV (DTV), Time Warner Cable (TWC) and private equity firms KKR, Guggenheim Digital and Silverlake Partners.
The major problem with acquiring Hulu is that its content is owned by some media conglomerates -- Walt Disney (DIS), News Corp. (NWSA) and Comcast (CMCSA), via its ownership of NBCUniversal -- and securing the rights to stream their movies and TV shows would likely be very taxing.
The fourth-generation processor promises better performance and longer battery life. And it could spell doom for ARM Holdings, Intel's British rival.
Dana Blankenhorn, TheStreet
Four years ago my son and I were honored to cover the CompuTex show in Taiwan, which is now the only computer show that matters.
Back then we were hunting for "desktop Linux." We finally found it in a corner of a secondary show floor. That was back when Windows netbooks were all the rage.
The rage this year is Intel's (INTC) Haswell, its new chip for notebooks and tablets. It follows by just a year the introduction of a similar chip, dubbed Ivy Bridge. Ivy Bridge introduced a new microarchitecture, Haswell a smaller die. The result is a low-power design whose circuit lines are just 22 nanometers apart.
Shares of the online auctioneer look like a value as the fast-growing company transforms itself into a cutting-edge retailer.
Teresa Rivas, Barron's
EBay is known for its hidden treasures, but the online auctioneer's stock may be the best bargain.
"EBay is remarkably well positioned to benefit from the structural shift in retail to omnichannel solutions," writes Greiner. "We see the recent broader market turbulence as an opportunity to again re-visit owning the shares."
On June 3, the company announced that it will lead a $50 million investment in Indian rival Snapdeal.com. Along with an equity stake, eBay will also get access to the New Delhi-based firm's 20 million users and distribution network.
Excitement around PayPal's prospects
Greiner's case is that the company's expanding user base and the success of its PayPal online payment processor will combine to boost earnings power and cash flow, and ultimately to reward shareholders.
"There is excitement around PayPal's long-term prospects versus Visa (V), MasterCard (MA) and American Express (AXP)," he notes. "This group of elite payments companies is at the forefront of the industry in terms of brand and scale."
PayPal has seen its transaction volume double in the last three years, and eBay expects it can repeat that feat by 2015. Moreover, nearly half of PayPal's transactions come from overseas and 10% come from mobile devices, two markets that are growing very rapidly.
Wedbush Securities analyst Gil Luria, who thinks the stock can rise to $64, wrote in a recent note that mobile commerce data from comScore suggests eBay is the "clear leader in the transition to mobile. . . . We believe mobile devices play into eBay's strengths as consumers become more focused on a smaller number of well integrated shopping apps."
Mobile is increasingly taking hold abroad as well, another positive for eBay. Overall, 52% of eBay's sales came from outside the U.S. last year, and its presence in 40 countries gives it a first-mover advantage in many quickly developing markets.
EBay already has more than 123 million active users, a base that is growing by about one million new users per month.
Expansion in new areas
The company is shifting its focus away from its auction business, expanding into new areas such as eBay Now, a same-day delivery service that works with large domestic brick-and-mortar companies.
"We believe eBay's desire to partner, not compete, with other merchants makes it an intriguing player in the evolving world of commerce," wrote Morningstar's R.J. Hottovy last month.
At less than 16.5 times forward earnings, eBay doesn't look overpriced, especially considering high multiples at companies such as Amazon.com (AMZN), which trades for a whopping 82 times 2014 estimates.
Its long-term earnings growth rate of 16% is ahead of the industry average, and it has a healthy 13.5% return on equity.
Compass Point's Greiner notes that the company's strong fundamentals leave plenty of room for valuation to expand.
"The top end of management's 2015 adjusted EPS guidance equals approximately $4.00. A 20 times P/E multiple justifies an $80 share price based on earnings power," the analyst notes. "EBay ended 2012 with approximately $6 per share in net cash. EBay's guidance assumes at least $11 billion in cumulative 2013-2015 free cash flow (equal to $8 per share). Adding it up -- earnings power plus today's net cash plus 2013 to 2015 cumulative free cash flow -- we calculate a bull case value of $94."
It might be too optimistic to hope that eBay will trade that high in the near future, but we think eBay still has room to run.
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
The final week of August represented one of the quietest stretches for the stock market so far this year. The first four sessions of the week produced the ... More
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