Filed under: Products and services, Consumer experience, Microsoft (MSFT), Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK), Research in Motion (RIMM), Palm Inc (PALM), iPhone, Technology

Research firm Canalys released its fourth quarter shipment data on the smartphone industry. The bottom line? Apple Inc. (NASDAQ: AAPL)’s iPhone is now in second place in the U.S.’s smartphone market. Globally, it’s in third place.

Nokia Corp. (NYSE: NOK) remained the global market leader, shipping 60.5 million smartphones last year. While its shipments grew 69% in the fourth quarter, its smartphone market share declined year-over-year from to 53% from 54%.

Research in Motion Ltd. (NASDAQ: RIMM) shipments grew 121% globally compared with a year before, as did its share of the market, growing from a 9% to over 11%.

Then Apple swooped into the third place, pushing Motorola Inc. (NYSE: MOT) to fourth place, and capturing 6.5% of the global market, despite starting to sell iPhones (very) late in the second quarter.

Canalys also estimated “that Apple took 28% share of the fast growing US converged device market in Q4 2007, behind RIM’s 41%, but a long way ahead of third placed Palm on 9%.” [converged devices==wireless handsets and smartphones]

That was hardware.In software, Apple also made strides. While Canalys estimates, “Symbian had a 65% share of worldwide converged device shipments, ahead of Microsoft on 12% and RIM on 11%,” in North America, Apple pushed Microsoft (NASDAQ: MSFT) to third place with a 21% share and took second place with 27%. RIM was the clear leader with 42%.

Pete Cunningham, Canalys senior analyst, said that “Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders.” At the same time he warned that “a broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market.”

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Filed under: Earnings reports, Products and services, Consumer experience, Coca-Cola (KO), PepsiCo (PEP)

PepsiCo (NYSE: PEP) reported Q4 and full-year earnings today, and the Street liked what it saw. Personally, I’m a fan of Coca-Cola (NYSE: KO), mainly because I own the stock — well, that’s pretty much the only reason, since I actually prefer Pepsi’s soda over Coke’s (although I do like Diet Coke best of all). As of this writing, it’s up about 5%.

Net revenue grew 17% for the fourth quarter and 12% for all of 2007. That’s great double-digit growth, but the bottom line actually declined 29% in the fourth quarter and rose a flat 2% for the full year. That was on a GAAP basis. Excluding various items, net income actually grew 8% in Q4 and 13% in 2007. Full-year operating cash flow jumped 14%, and it was more than enough to cover capital spending and the blue-chip dividend (the latter of which is a key reason why investors put this stock on buy, hold, reinvest, and forget!).

Snack volume — remember, Pepsi owns the tasty Frito-Lay portfolio and the Quaker brand — grew 6%, while beverage volume expanded by 4%. Pepsi expects higher operating cash flow for fiscal 2008 — $7.6 billion versus the $6.9 billion generated in 2007 — and it is planning to continue share repurchases. Yes, I suppose I’d rather you buy shares in Coke since I own them, but truth be told, investors will probably do well owning either beverage company (I do concede that I envy the Frito-Lay asset).

Disclosure: Steven Mallas owns shares in Coke, and might buy more at any time.

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Filed under: Products and services, Consumer experience, Microsoft (MSFT), Apple Inc (AAPL), Motorola (MOT), Nokia Corp. (NOK), Research in Motion (RIMM), Palm Inc (PALM), iPhone, Technology

Research firm Canalys released its fourth quarter shipment data on the smartphone industry. The bottom line? Apple Inc. (NASDAQ: AAPL)’s iPhone is now in second place in the U.S.’s smartphone market. Globally, it’s in third place.

Nokia Corp. (NYSE: NOK) remained the global market leader, shipping 60.5 million smartphones last year. While its shipments grew 69% in the fourth quarter, its smartphone market share declined year-over-year from to 53% from 54%.

Research in Motion Ltd. (NASDAQ: RIMM) shipments grew 121% globally compared with a year before, as did its share of the market, growing from a 9% to over 11%.

Then Apple swooped into the third place, pushing Motorola Inc. (NYSE: MOT) to fourth place, and capturing 6.5% of the global market, despite starting to sell iPhones (very) late in the second quarter.

Canalys also estimated “that Apple took 28% share of the fast growing US converged device market in Q4 2007, behind RIM’s 41%, but a long way ahead of third placed Palm on 9%.” [converged devices==wireless handsets and smartphones]

That was hardware.In software, Apple also made strides. While Canalys estimates, “Symbian had a 65% share of worldwide converged device shipments, ahead of Microsoft on 12% and RIM on 11%,” in North America, Apple pushed Microsoft (NASDAQ: MSFT) to third place with a 21% share and took second place with 27%. RIM was the clear leader with 42%.

Pete Cunningham, Canalys senior analyst, said that “Apple has shown very clearly that it can make a difference and has sent a wakeup call to the market leaders.” At the same time he warned that “a broad, continually refreshed portfolio is needed to retain and grow share in this dynamic market.”

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Filed under: International markets, Other issues, Rants and raves, Competitive strategy, China, Middle East, Scandals, Boeing Co (BA), Lockheed Martin (LMT), United Technologies (UTX), Politics, Stocks to Buy, General Dynamics Corp (GD), Northrop Grumman (NOC), Raytheon Company (RTN)

President Bush recently submitted a $3.1 trillion dollar budget to congress with the biggest proposed increases in defense spending, and homeland security. The Pentagon would get a $35 billion increase to $515 billion for core programs, about 7% with war costs additional (but how much is additional?) This further supports my investment posture for this year and next that the defense sector is the place to be as I posted earlier today and many times over the past few months — the BIG BUYS.

Some of our big defense contractors, all of which should benefit to some degree include: Boeing (NYSE: BA), General Dynamics (NYSE: GD), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), Raytheon Company (NYSE: RTN), and United Technologies (NYSE: UTX). I am not suggesting that you jump into these stocks immediately, but you should add them to your watch list. Perhaps, for some investors dollar cost averaging into them over six months would make sense. Each has a varying degree of exposure to defense spending. For example, United Technologies is the parent of Sikorsky helicopters which makes the Black Hawk. Lockheed Martin and Boeing make fighter jets. Raytheon makes defense electronics and missile while General Dynamics and Northrop Grumman supply warships to the US Navy. Northrop also makes aerial vehicles that are being used in the Iraq War.

Continue reading Defense stocks should be on your radar screen

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Filed under: Earnings reports, Products and services, Consumer experience, Coca-Cola (KO), PepsiCo (PEP)

PepsiCo (NYSE: PEP) reported Q4 and full-year earnings today, and the Street liked what it saw. Personally, I’m a fan of Coca-Cola (NYSE: KO), mainly because I own the stock — well, that’s pretty much the only reason, since I actually prefer Pepsi’s soda over Coke’s (although I do like Diet Coke best of all). As of this writing, it’s up about 5%.

Net revenue grew 17% for the fourth quarter and 12% for all of 2007. That’s great double-digit growth, but the bottom line actually declined 29% in the fourth quarter and rose a flat 2% for the full year. That was on a GAAP basis. Excluding various items, net income actually grew 8% in Q4 and 13% in 2007. Full-year operating cash flow jumped 14%, and it was more than enough to cover capital spending and the blue-chip dividend (the latter of which is a key reason why investors put this stock on buy, hold, reinvest, and forget!).

Snack volume — remember, Pepsi owns the tasty Frito-Lay portfolio and the Quaker brand — grew 6%, while beverage volume expanded by 4%. Pepsi expects higher operating cash flow for fiscal 2008 — $7.6 billion versus the $6.9 billion generated in 2007 — and it is planning to continue share repurchases. Yes, I suppose I’d rather you buy shares in Coke since I own them, but truth be told, investors will probably do well owning either beverage company (I do concede that I envy the Frito-Lay asset).

Disclosure: Steven Mallas owns shares in Coke, and might buy more at any time.

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Filed under: Stocks to Buy

YRC Worldwide (Nasdaq: YRCW) is the largest U.S. operator of motor carriers that offer less-than-truckload freight services.

Just because a sector is down doesn’t mean that there aren’t opportunities within the business category. Trucking transport has been a sector under pressure, and with the above in mind, YRC Worldwide is worth a review.

Analysts expect road freight sector conditions to improve gradually in 2008, with a slight revenue increase for YRCW, on mild tonnage gains and some pricing power. Margins should also improve in 2008.

Longer term, analysts expect YRCW to improve operational performance via ongoing efforts to rightsize its fleet and eliminate operational overlaps. The Reuters F2008/F2009 EPS consensus estimates for YRCW are $1.64/$2.42.

To be sure, YRCW’s stock carries considerable risk, but the argument here is that improved operations and a pull-back in average oil prices for 2008 to the ‘low’ $75-80-level will provide enough tailwind to improve bottom-line results. Those facts, combined with a p/e of 8 make the YRCW risk/return favorable.

The risks? A U.S. recession would (obviously) hurt YRCW’s results. Analysts also have an eye on the company’s pension costs.

The First Call mean rating for YRCW is: Hold. [13 firms.] Mean 2008 target: $18.00. [high: $25, low: $15.]

Stock Analysis: YRC Worldwide is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from YRCW’s shares. Sell / Stop Loss if you were to purchase shares in this company: $8.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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Filed under: International markets, Other issues, Rants and raves, Competitive strategy, China, Middle East, Scandals, Boeing Co (BA), Lockheed Martin (LMT), United Technologies (UTX), Politics, Stocks to Buy, General Dynamics Corp (GD), Northrop Grumman (NOC), Raytheon Company (RTN)

President Bush recently submitted a $3.1 trillion dollar budget to congress with the biggest proposed increases in defense spending, and homeland security. The Pentagon would get a $35 billion increase to $515 billion for core programs, about 7% with war costs additional (but how much is additional?) This further supports my investment posture for this year and next that the defense sector is the place to be as I posted earlier today and many times over the past few months — the BIG BUYS.

Some of our big defense contractors, all of which should benefit to some degree include: Boeing (NYSE: BA), General Dynamics (NYSE: GD), Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), Raytheon Company (NYSE: RTN), and United Technologies (NYSE: UTX). I am not suggesting that you jump into these stocks immediately, but you should add them to your watch list. Perhaps, for some investors dollar cost averaging into them over six months would make sense. Each has a varying degree of exposure to defense spending. For example, United Technologies is the parent of Sikorsky helicopters which makes the Black Hawk. Lockheed Martin and Boeing make fighter jets. Raytheon makes defense electronics and missile while General Dynamics and Northrop Grumman supply warships to the US Navy. Northrop also makes aerial vehicles that are being used in the Iraq War.

Continue reading Defense stocks should be on your radar screen

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Filed under: Rumors, Products and services, Starbucks (SBUX)

Rumors now frequently circulate about massive music acts leaving their long-term record labels. Last spring Paul McCartney defected from EMI after 45 years to join Starbucks‘ (NASDAQ: SBUX) Hear Music label. Madonna left Warner Music Group (NYSE: WMG) last fall. Other artists have followed suit, while some who are still signed have started speaking out against their labels. In this most recent case, Irish rock band U2 is rumored to be leaving Vivendi’s Universal Music Group to sign up with Live Nation (NYSE: LYV).

Although I wouldn’t blame the artists for leaving their labels, as long as it is in their best interests and increases fans accessibility to the music, it is certainly going to affect the record industry long-term if the defections continue. At the same time, many critics and bloggers would point out that the acts switching labels are already past their prime — their big hits and money-making lies with albums that came while they were at the labels. That may be true for acts like McCartney, U2, and Madonna, but the best example of this — Radiohead — is hardly through making the huge hits they enjoyed while with a major record label.

Radiohead, if you remember, is that “little” band that caused such a stir last October when it decided to release its new album, In Rainbows, to fans in a pay-what-you-want model. When the album was released on CD earlier this year it hit #1 in numerous charts around the world.

Obviously, none of these acts would have achieved such huge successes without major record labels, and it is impossible to say that the future of the record industry is without music labels. These rumors and the actual occurrences indicate that companies like Live Nation and Starbucks, while not necessarily oriented primarily for music distribution, are making better gains than the labels. This will not be ignored for long so the rumors may cease, and only indicates the movement music acts are making for the time being.

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Filed under: Google (GOOG), Cisco Systems (CSCO), Alcatel-LucentADS (ALU), Stocks to Buy, Stocks to Sell

Armored vehicle maker Force Protection (NASDAQ: FRPT) has been slammed down to the single digits on fears that its sole product might be on the way out because of cuts in government spending. Who knows? The CEO says the company is doing fine, but the downtrending stock price is much more convincing. If the stock price is meant to make up lost ground, it should have no problem breaking out past $6, which it has not been able to do for the past few months. I’d avoid until the stock shows some strength.

Within the past few days, IDM Pharmacueticals (NASDAQ: IDMI) has had a huge run-up from under $1 to nearly $4 and a substantial drop to just under $2 — all due to some positive drug news that was already known since November 2007, and of course the CEO’s optimism about European approval. Do I believe the CEO? Yeah right! My distrust of CEOs is dwarfed only by my distrust of biotech CEOs! This company is not in the same league as other recently hot biotechs like Savient Pharmaceuticals (NASDAQ: SVNT) and Rigel Pharmaceuticals (NASDAQ: RIGL). Avoid, with a short bias on any spikes.

When I wrote this article about A-Power Generation Systems (NASDAQ: APWR), all the variables were aligned for a great run-up. I wanted to hold, but the volume and share price didn’t live up to my expectations, so I sold quickly. Now, this company, potentially the new First Solar (NASDAQ: FSLR) of wind energy, has nearly retraced to its original breakout area around $15, so the risk has gone down … but so has the reward. If you’re a long-term investor, this is a solid choice, but I need it to break its previous highs at $19 to make me a buyer again. Avoid, with a long bias if it breaks out.

Continue reading Five smallcaps I’m watching right now

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Filed under: Stocks to Buy

YRC Worldwide (Nasdaq: YRCW) is the largest U.S. operator of motor carriers that offer less-than-truckload freight services.

Just because a sector is down doesn’t mean that there aren’t opportunities within the business category. Trucking transport has been a sector under pressure, and with the above in mind, YRC Worldwide is worth a review.

Analysts expect road freight sector conditions to improve gradually in 2008, with a slight revenue increase for YRCW, on mild tonnage gains and some pricing power. Margins should also improve in 2008.

Longer term, analysts expect YRCW to improve operational performance via ongoing efforts to rightsize its fleet and eliminate operational overlaps. The Reuters F2008/F2009 EPS consensus estimates for YRCW are $1.64/$2.42.

To be sure, YRCW’s stock carries considerable risk, but the argument here is that improved operations and a pull-back in average oil prices for 2008 to the ‘low’ $75-80-level will provide enough tailwind to improve bottom-line results. Those facts, combined with a p/e of 8 make the YRCW risk/return favorable.

The risks? A U.S. recession would (obviously) hurt YRCW’s results. Analysts also have an eye on the company’s pension costs.

The First Call mean rating for YRCW is: Hold. [13 firms.] Mean 2008 target: $18.00. [high: $25, low: $15.]

Stock Analysis: YRC Worldwide is a moderate-risk stock not suitable for low-risk investors. Investors with an investment horizon longer than 2 years should be rewarded from YRCW’s shares. Sell / Stop Loss if you were to purchase shares in this company: $8.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.

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