The $19 billion WhatsApp deal could become the Facebook founder's legacy . . . or his albatross.
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Down for the short term, BHP Billiton, China Mobile, and McDonald's should have profitable futures.
There's no law that says a bull market in stocks can only last five years. But "efficient market" theory does state that eventually all equities will be fairly and fully valued based on the information available. That should result in blue chips with compelling features such as BHP Billiton (BHP), China Mobile (CHL) and McDonald's (MCD) rising again to reward the patient long term investor.
Over the 12 months, the Standard and Poor's 500 index is up more than 23 percent.
But not all stocks have been lifted by the rising S&P. BHP Billiton, the world's largest natural resources company, has fallen more than 12 percent over that period. China Mobile, the world's largest cell phone company, is down by more than 15 percent. McDonald's, the world's largest fast food restaurant, is off by 3.7 percent.
Shares of Plug Power took a beating Tuesday after an analyst listed the fair value of the stock at 50 cents.
By Joel Elconin
It's fine and dandy to be long momentum stocks when they are on their parabolic moves higher. However, once the tide turns, it can get really ugly in a hurry.
There is no better example of this price action than Tuesday's activity in the fuel cell sector, Plug Power (PLUG) in particular. The issue, which began the year at $1.56, reached $11.72 in Tuesday's trading before the longs pulled the plug. The flurry of selling has taken the issue down over $4.00 from its intraday high to $7.11.
Perhaps the decline can be attributed to a delayed reaction to a scathing report issued by well-known short seller, Citron Research. The firm's analysis is pretty straightforward: during its decade of existence, the solar company has lost close to $850 million, has developed no intellectual property or shown meaningful revenue growth. In their opinion, the fair value of PLUG may be $0.50.
Chipotle is an extremely well-run company in the midst of robust growth. But its stock, like Wal-Mart's a decade ago, may nonetheless be hitting its peak.
Throughout the 1990s, shares of Wal-Mart (WMT) and Microsoft (MSFT) exploded higher year after year. Investors realized that these firms had so powerfully revolutionized their respective industries, that they could maintain solid growth far into the future. (Microsoft owns and publishes MSN Money.)
Their faith was well placed. Wal-Mart, for example, which had racked up an impressive $156 billion in sales by fiscal (January) 2001, would boost sales above $300 billion by fiscal 2006 and $400 billion by fiscal 2010. For its part, Microsoft saw its sales grow from $23 billion in fiscal (June) 2000 to $60 billion by fiscal 2008.
Trouble is, investors didn't benefit. Shares of Wal-Mart fell more than 25 percent from their 1999 peak over the next decade, while shares of Microsoft lost half of their value. In hindsight, it would have been wise to sell these two stocks prior to another decade of solid sales and profit growth. Simply put, their valuations had become so extended that the company's financial performance needed a decade to catch up.
While they don't know when it will burst, they do recommend looking to Europe if you want a safer bet.
Prominent money managers are warning of a bubble in some technology stocks and recommending investors avoid emerging markets in favor of Europe.
"The high probability is when you look back on this period five years from now, you'll say some of these companies grew into their (earnings) multiples ... but I think biotech and other areas in tech have seen multiple expansions beyond what we can justify beyond any kind of reasonable cash flow expectations," Doug Silverman, co-founder of $6.7 billion hedge fund firm Senator Investment Group, said Monday at the Portfolios with Purpose Awards Night in New York.
"You can only call it a bubble. But I have not guessed when it will end," Silverman added.
The apparel chain takes a hard hit after blaming the weather for its quarterly sales decline. But cold temperatures don't explain the drop in full-year sales as well.
The company reported sales that were down 7 percent for the quarter, citing the harsh winter weather as a cause. But sales for the full year were also down by 5 percent, which gave investors cause for concern that there was more than just the cold weather at play here.
On Tuesday's installment of Stock of the Day, host Mark Reeth and Motley Fool analyst Taylor Muckerman discuss what else may have pulled the company down.
As the economy picks up steam and baby boomers retire, sales of recreational vehicles are making a comeback. Here are 3 stocks to play the trend.
By Nelson Hem
The growing economy and the mass retirement of baby boomers have led to a resurgence in the recreational vehicle industry.
Sales of new RV units increased 11 percent year-over-year in 2013, and some estimates call for 2014 sales of more than 335,500 units, which would be the highest in six years.
While there have been concerns about how the inclement weather has so far affected sales and production, most RV sales come in the spring and summer, by which time the polar vortex should be a distant memory.
Below we take a look at how Drew Industries, Thor Industries and Winnebago Industries have fared and what analysts expect from them.
The Detroit automaker recalled 1.6 million vehicles last month -- several years after a deadly problem was discovered.
General Motors (GM) and the National Highway and Traffic Safety Administration are under scrutiny for taking years to address an ignition switch problem that is tied to 13 deaths.
Last month, the Detroit automaker recalled 1.6 million vehicles. NHTSA has launched an investigation into how long it took GM to admit there was an issue and take action.
GM learned about at least one incident of ignition switch problems in the 2005 Chevrolet Cobalt around the time of the vehicle's launch, according to a chronology report submitted to NHTSA.
The report says GM employees were able to replicate the ignition switch issue, where the key moved out of the "run" position when the driver accidentally contacted the key or steering column. An engineering inquiry was opened to investigate the issue. Although there were potential solutions, the inquiry was closed without action "after consideration of the lead time required, cost, and effectiveness of each of these solutions," according to the report.
The coffee company's plan to make K-Cups exclusive to its new Keurig machine sounds awfully familiar to iTunes' failed plan for music files a decade ago.
A company built around hardware with functional obsolescence decides to enclose its ecosystem by using digital rights management (DRM) to limit the use of its fairly interchangeable software.
Why are we seeing this flawed plotline again in 2014 when we learned how the story ends in 2009?
Mostly because Green Mountain Coffee Roasters (GMCR) thinks that turning its Keurig business into iCoffee is just about the only way it can keep third-party suppliers from cutting into its take.
According to a report last week from TechDirt, Keurig has been striking proprietary agreements with its suppliers that will make their K-Cup coffee pods exclusive to new Keurig machines that the company will introduce in the fall. A lawsuit filed by Treehouse Foods against Keurig found that the company is working with the coffee equivalent of DRM to not only make third-party and refillable pods unusable in its new machines, but to lock its new K-Cups out of older, more open-source Keurig models.
The activist investor is best known for ruffling corporate feathers. Here's a look at how companies he's targeted have fared lately.
By Nelson Hem
In his latest letter to eBay shareholders, Icahn said he had "not yet begun to fight" and again pushed for the company to spin off its PayPal unit, as well as replace certain board members. eBay denies that shareholders support such moves, despite results of a new survey that suggest otherwise.
Below is a quick look at how these four stocks have fared, and what analysts in general expect from them. Some other Icahn picks include Hologic, Navistar International, Nuance Communications, Talisman Energy, and of course his own Icahn Enterprises.
China still calls the shots on commodities, but there's a small sign of change.
Does anyone besides China use raw materials? What has happened to the world that one country seems to be the end all, be all of commodities? Isn't there materials demand elsewhere? Are we simply going to use the price of some commodities to determine the future of hundreds of companies? And are we going to decide that the savings of consumers of commodities equal nothing to anyone -- nothing positive, at least -- even as we care so much about gross margins?
Monday was the first day that I can recall when we plunged on China weakness and then shook it off, although we never shook off anything commodity. The way the commodity stocks work these days is that they must go down on every weak Chinese data point. If you graph weak Chinese data points over the stock prices, what you will see is a pretty perfect correlation between the downticks on both. It simply doesn't matter, by the way, if the companies are making money or even if they are trying to do the right thing to bring down costs.
Softbank's president is back in Washington to try to sway US regulators that a Sprint/T-Mobile merger would be good for everyone.
Japan's Softbank hasn't given up on the idea of some sort of merger of the third-largest U.S. cellular carrier Sprint (S) and the country's No. 4, T-Mobile (TMUS).
In a new interview with PBS's Charlie Rose, Softbank President Masayoshi Son, who also is the chairman of Sprint, said Sprint is still very interested in buying T-Mobile.
Son told Rose in no uncertain terms that he wants a T-Mobile deal so he can compete with the big guys -- Verizon (VZ) and AT&T (T) -- and so the new company can pressure everyone to lower the high monthly service fees U.S. consumers are currently being charged.
Sprint's stock gained nearly 1.5 percent to $8.85 and T-Mobile was up more than 2.9 percent to $31.85 in early trading on Tuesday.
Improving the US's technological infrastructure would be a costly undertaking, but government regulation could help boost connection speeds and competition.
As I wrote last week, the United States — the country where the internet was invented — now ranks 31st in the world for internet speed, behind such countries as Romania, Estonia, South Korea, and Uruguay.
The fastest internet in the world — namely, in Hong Kong and Singapore — can be found in tiny city-states. But America's geographic bulk isn't necessarily the issue. After all, some relatively large countries, like Sweden and Japan, are way ahead of the United States in internet speed.
It doesn't have to be this way. The U.S. has some of the fastest commercially available internet connections in the world, such as Google Fiber, at up to 1Gbps, almost 50 times faster than the U.S. average. If just half of homes around the country had access to those kinds of speeds, the U.S. would comfortably be the fastest place on Earth. The problem — and the place where other countries have begun to leapfrog the U.S. — is not developing superfast connections, but making those speeds available to more people.
Facebook's interest in drone maker Titan Aerospace shows that unmanned aircraft are more than just hot air.
By Susan J. Aluise
What do Mark Zuckerberg, Defense Secretary Chuck Hagel and a U.K. Domino's (DPZ) franchise owner have in common? Innovative ideas for using unmanned aerial vehicles (UAVs), commonly known as drones.
With myriad new commercial and military applications, drones might be one of the coolest, highest-potential tech markets around for investors. The next big thing is here: drone stocks.
Zuckerberg's Facebook (FB) raised the ante in the commercial drone war this week with news of a deal to buy UAV manufacturer Titan Aerospace for $60 million. Titan's solar-powered UAVs -- which can stay airborne for five years at an altitude of 65,000 feet -- potentially could enable FB to cost-effectively extend the reach of the Internet and mobile services to underserved rural regions around the globe.
Shares of DVR pioneer TiVo are up 40% over the past 2 years, but unlike with the industry giants, there's still plenty of room to run with this pay-TV play.
By David Sterman
Many corporate executives place a lot of faith in the rational behavior of the markets.
If they deliver on the promises they've set out for investors, the market should reward them with a sufficiently higher share price. But sometimes, the market fails to respond, even when management delivers.
The executives at DVR pioneer TiVo (TIVO) have surely done what they promised, yet shares remain remarkably undervalued. Roughly two years ago, I laid out a series of catalysts that would help boost this stock by 50 percent.
Shares have risen 40 percent since then, but that's cold comfort for investors who have seen the S&P 500 rise 52 percent in that time. Shares of cable TV companies have more than doubled in that time, making TiVo a relative loser in this industry. But if you are looking to apply fresh money to this industry now, forget the cable giants. It's simply hard to see any more upside for them. Instead, refocus your sights on TiVo, which holds appeal to both value and growth investors.
Like many companies this winter, the fast-food giant blamed a drop in same-store sales on the weather. But could its problems be bigger than a snowbank?
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Down for the short term, BHP Billiton, China Mobile, and McDonald's should have profitable futures.
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.
[BRIEFING.COM] The major averages have continued their rebound with the Nasdaq (+0.2%) climbing into the green thanks to the relative strength of the technology sector (+0.2%).
Chipmakers have fueled a good portion of the rebound while top-weighted tech components remain somewhat mixed. Intel (INTC 24.83, +0.10) is higher by 0.4% while the broader PHLX Semiconductor Index trades up 0.5%.
Technology notwithstanding, the energy sector (+0.2%) has also contributed to the ... More
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