XY Auto Car: June 2015

Tuesday, June 30, 2015

IOS 7 is here: A whole new iPhone experience

The new iOS 7 iPhone software not only has a new look, but Apple successfully addresses many long-standing issues.

NEW YORK (CNNMoney) Your iPhone is about to get a giant makeover: Apple is pushing out iOS 7 to iPhone users on Wednesday.

The new iPhone operating system is the most substantial update in the software's history. Apple not only added new features and functionality, but the company radically reinvented the six-year old operating system's appearance.

For the most part, Apple (AAPL, Fortune 500) succeeded in making iOS easier on the eyes and simpler to use. Apple trimmed the fat where necessary and added some meat to areas that were lacking.

New look: The most noticeable difference in iOS 7 is the design. Gone are the core apps that look like real-life objects. In their place is a far more modern, streamlined, flatter digital aesthetic.

Apple didn't eliminate depth and texture altogether, but it redefined how it uses those effects. For instance, Apple made some menus and features appear translucent, like a frosted sheet of glass. That not only provides a stylish touch, but it produces a layered effect to help visualize how different parts of an app are linked, and how they are separate.

Inside Apple's new iOS 7

You'll notice this everywhere from the home screen icons to the design of the lock screen to the screen that shows up when you receive a call. But the way you use those elements is more or less the same as before.

Related story: Hits and misses of Apple's new iPhones

And there are still touches of the old version of iOS throughout the new iOS 7. For example, the Messages app still uses speech ! bubbles, and the camera app still uses an on-screen shutter button. But the look of those features has been spruced up as well.

There was a time when Apple had to demonstrate how its flat, glass screen could replace many self-contained gadgets people already owned. So everything had a glassy, textured layer applied to it. The calendar had to look like a paper calendar. The compass had to look like something you'd see in a 16th-century Spanish galleon.

Now that the vast majority of us understand our smartphones, Apple has been able to ditch those visual analogs and become truer to its sleek, modern hardware.

New features: Perhaps the most useful addition to iOS 7 is Control Center. It's your metaphorical junk drawer full of settings, media playback controls, and shortcuts to utility apps, like the clock, camera and calculator. You can now also toggle the LED on and off from control center, functioning as a de facto flashlight. And it's easily accessible: just swipe up from the bottom of the screen.

Control Center isn't a revelation: Having quick access to Airplane Mode, Wi-Fi and Bluetooth is something that's long been on Android. But it's a welcome addition -- and frankly should have already been added to iOS a long time ago.

Related story: Apple will never make a cheap iPhone

Siri's functionality has been expanded some. It can now be used to search for Wikipedia and Twitter. That's nice, but it's still no Google (GOOG, Fortune 500) Now, which can tell you to leave home earlier than usual because there's an accident on the freeway.

The new weather app in iOS 7 is more informative than ever, and the App Store can automatically update your apps.

The Photo app has mostly been changed for the better by automatically arranging your photos according to time and place. But the new shared photo streams addition felt incomplete. It allows multiple people to share and comment on photos -- think of it as a remixed version of group MMS. But wit! h so many! people already using Apple's iMessage to share photos, it's unclear why people are supposed to use the new feature.

The Notification Center in iOS 7 now has three separate sub-pages, making it feel more bloated and confusing than its previous iteration. For example, if you don't use a calendar, one of the sub-pages is just a completely empty screen.

Question marks: Apple overhauled multitasking in iOS 7, giving apps the ability to fully run in the background. That means apps like Twitter and Facebook will be able to automatically update their feeds without you having to open the app. Apple even promises that iOS 7 will learn which apps you use the most, when you use them, and will make sure they're always updated at that time. But it will be hard to tell how well this feature will work until app makers begin to support it.

iPhones 5C and 5S good enough for Apple

Airdrop is Apple's file sharing protocol, allowing iPhone users to share photos, contacts and things like passbook cards with one another. In theory, it is a wonderfully simple way to transfer files. But you can't use it with the Mac version of Airdrop. And the main appeal of Airdrop seems to be photos -- which is confusing since that's what shared photostreams are for. Until there is a critical mass of people running iOS 7, it's hard to gauge how useful Airdrop will be.

Bottom line: Despite a few hiccups in execution, Apple has successfully re-thought iOS for the better.

The biggest achievement of iOS 7 is Apple's willingness to acknowledge that it's immensely successful hardware had gone a bit stale. Apple had the awareness and courage to make some major changes without doing anything so drastic that it risked alienating its user base.

IOS 7 isn't perfect, but it's still as wor! thy a mob! ile OS as Google's Android. IOS 7 lays down the foundation for the next five or so years that will allow Apple to keep the iPhone feeling modern and progressive.

Thursday, June 18, 2015

What Makes Clients Happy? A Good Retirement Plan

Americans that work with a financial advisor are twice as happy about and confident in their retirement plans as those not working with an advisor, according to a study released Wednesday by Franklin Templeton.

The 2013 Franklin Templeton Retirement Income Strategies and Expectations survey found that 90% of investors working with advisors are pleased with their retirement income plans, and 87% are confident in these plans. Just 44% of investors who are not working with advisors say they are happy with and confident in such plans.

“The findings confirm that the most essential emotions surrounding retirement income planning—happiness with, confidence in, as well understanding one’s plan—are all increased substantially when you work with a financial advisor,” said Michael Doshier, vice president of Retirement Marketing for Franklin Templeton Investments, in a press release.

For the study, some 2,000 adults 18 and older completed an online survey in January.

Investors who work with advisors are much more likely to understand their retirement income plan (86%) versus investors who don’t (48%).

“Retirement income planning can be overwhelming, and professional assistance goes a long way in not only achieving financial goals, but feeling good about the process,” Doshier said.

More than half of investors who completed the survey, 58%, cited experience with retirement planning as the most important factor when selecting an advisor. Plus, the same number, 58%, who had developed a written retirement income plan said they understood how much of their current income would be replaced by Social Security.

In addition, over half (51%) indicated that they would switch financial advisors or begin working with one for the first time if an advisor developed a written retirement income strategy for them. This was particularly true for investors in their key asset-accumulation years, specifically, 65% of those 35-44 and 62% of those ages 25-34.

When asked what they most want most from an advisor, investors said:

Over the next five years, close to a third (31%) of investors expect to change their retirement strategy, while 22% plan to make changes in their retirement investments. Also, 13% anticipate beginning to work with a financial advisor for the first time.

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Check out Median Retirement Balance Is $3,000 for All Working-Age Households on AdvisorOne.

Wednesday, June 17, 2015

Hulu Sale Called Off - Analyst Blog

Owners of Hulu have abandoned the plan to divest the company and have decided to invest in the online video streaming company instead. The owners aim to create a strong competitor for market leader, Netflix Inc. (NFLX). This is the second time in two years that the sale of Hulu has been called off.

Hulu is currently owned by News Corp. (NWSA), Walt Disney Co. (DIS) and Comcast Corp (CMCSA). Notably, Comcast acts as a silent partner following its acquisition of NBC Universal.

Hulu attracted bids from several potential bidders, which included big companies like DIRECTV (DTV), Time Warner Cable Inc. (TWC) and a joint bid from AT&T Inc. (T) and Chernin Group. While AT&T and DTV proposed a $1 billion dollar bid, Time Warner Cable wanted to become a stake holder in Hulu.

However, the bidders were restricted from owning the content rights for Hulu for more than two years. Network companies generally hike prices post the completion of the agreement.

The current owners have decided to retain ownership and inject $750 million for future growth. In spite of having no management control, Comcast will contribute an equal share of the $750 million investment.

The media houses have agreed that they will retain the subscription base model and will deliver content to enhance the customer's subscription value. However, postponing the sale still leaves the possibility of a stake sale.

Hulu received such high interest from potential bidders as growing saturation in the U.S. pay-TV market and increased competition from online video streaming service providers has sliced the traditional pay-TV operator's market share. Furthermore, Hulu boasts a strong subscriber base of more than 4 million and has generated $700 million revenues last year through advertising and monthly subscriptions.

Owners of Hulu wanted a buyer keen on investing in programming and maintaining its growth momentum. The media groups have confirmed that they themselves will spend on programm! ing, marketing, technology and expansion from the proposed $750 million investment.

Acquiring Hulu would have given the traditional pay-TV operators the leverage to negotiate better with the media companies. Nevertheless, Hulu's independent standing is favourable for the customers. We believe that stiff competition from this over-the-top (OTT) companies like Hulu may force the pay-TV operators to reduce their monthly fees to remain competitive.

Sunday, June 14, 2015

Get Paid To Buy This Rebound Play, With A Shot At 80% Upside

The changes at Groupon (Nasdaq: GRPN) appear to be paying off. The departure of founder and CEO Andrew Mason in February marked an emotional low point. The stock has doubled since then, and it is now up nearly 250% from the extreme low in November.

The bottoming bounce from the $2.60 low to the $9.43 yearly high has support at the $6 midpoint of the range.

Looking at the bigger picture, the post-IPO high near $31 to the extreme lows has a recovery target of about $16, about 82% above the current price.

As of this writing, GRPN is trading around $8.80. If you are comfortable holding on to this inexpensive stock for a potential recovery, then selling put options could allow you to collect income while you wait to get into GRPN at a 14% discount.

Cash-Secured Put Selling Strategy
While the typical investor might use a limit order to buy a stock or ETF at a designated price or lower, the options trader can do one better by selling a cash-secured put.

This strategy has the same mathematical risk profile as a covered call. With put selling, there is an obligation to buy the stock at the strike price if it is assigned, allowing you to get into the stock at a discount. In fact, the true entry cost basis is even lower with the subtraction of the premium you earned from selling the puts.

And if the stock is not below the strike price at expiration, then the premium received is all profit. In other words, you're getting paid not to own the stock.

There are two rules traders must follow to be successful at selling put options.

Rule One: Sell puts only on stocks you want to own.
The intention of this strategy is to be assigned the stock as a long-term investment (each option contract represents 100 shares). So make sure you have the money ready to buy the stock at the options' strike price if a sell-off occurs. Paying in full ensures that no additional money is needed to hold the stock for potentially many months or even years until a price recovery.

Rule Two: Sell either of the front two option expiration months to take advantage of time decay.
Collect premium every month on put sales until you are assigned shares at a cost-reduced basis. Every month that you keep the premium is money subtracted from your entry price.

Action to Take --> Sell to open GRPN Aug 8 Puts at 40 cents or better. (This is a volatile stock, so I suggest using a limit order to get the desired price.)

This cash-secured put sale would assign long shares at $7.60 ($8 strike minus 40-cent premium), which is about 14% below GRPN's current price, costing you $760 per option sold. If the options expire worthless, you keep the $40 premium, earning a potential 5.3% return in 23 days.

But remember, you should only sell this put if you want to own GRPN at a discount to the current price. If you are assigned the shares, a September covered call can be sold against the stock to lower your cost basis even further.

If the stock does not fall below the strike price before expiration, then you keep the premium you collected, essentially getting paid not to buy the stock.

For more analysis on GRPN, see the video below (starting at 3:10):

This article was originally published at ProfitableTrading.com:
Get Paid to Buy This Stock at a Discount for a Chance at an 80%-Plus Rally

Wednesday, June 10, 2015

Pentagon Watch: Where Did Your Tax Dollars Go This Week?

The U.S. military has a reputation as a somewhat secretive organization. But in one respect at least, it ranks among the most "open" of our government agencies. The Department of Defense is positively sunshine-y in the frequency and clarity with which it describes the contracts it issues to private companies, updating them daily on its website.

So what has the Pentagon been up to this week?

The Department of Defense requested $614 billion in total funding for the current fiscal year 2013. Spread over 52 weeks, that works out to $11.8 billion in spending. And with about 47% of that money, historically, going to personnel costs, that leaves about $6.2 billion a week to spend on military hardware (planes, trains, and main battle tanks), infrastructure projects (such as resiting a VA hospital, dredging a river, or constructing an air base), services (engineering and software design work), and military supplies.

Last week, the Pentagon awarded contracts worth a combined $6.226 billion -- putting it right on target to spend all the money it's been allotted for this fiscal year, "sequester" notwithstanding. Where did the money go?

To Russia with cash
Well, probably the biggest news of the week, and certainly the most controversial, was a contact issued Monday to pay a Russian defense contractor, Rosoboronexport, $572.2 million (later revised down to $553.8 million) for 30 Russian Mi-17 transport helicopters -- that we will promptly hand over to the Afghan National Securities Forces. This follows on a decision one week earlier to hand a Brazilian company, Embraer (NYSE: ERJ ) a $1 billion contract to build fighter planes for the Afghan Air Force.

Afghan military Mi-17 helicopters in flight. Source: Wikimedia Commons.

In one respect, therefore, it appears that sequestration of defense spending may be having an effect on U.S. defense contractors -- it's forcing the Pentagon to be more careful about how it spends its cash, and to give more business to low-cost defense contractors from other countries.

Nor is the Pentagon the only actor pinching its pennies. Last week, Boeing (NYSE: BA ) also headed to Brazil to sign a deal cooperating with Embraer on the global marketing of the latter's KC-390 aerial refueling tanker.

Heavily into helicopters ...
Boeing also made news this week when it landed its second multibillion-dollar contract in as many weeks, for the sale of Chinook heavy lift helicopters. Two weeks ago, the U.S. Army ordered up $4 billion worth of the whirlybirds. This week, Boeing won a $3.4 billion contract to sell more Chinooks to the militaries of Turkey and the United Arab Emirates, with the U.S. government acting as the middleman.

U.S. Army CH-47 Chinook. Source: Wikimedia Commons.

... and softly into software
Another big winner for the week was Microsoft (NASDAQ: MSFT ) . The Pentagon granted Mr. Softy a contract worth up to $412.2 million for Microsoft Blue Badge cardholder support. This contract, whereby Microsoft will assist the Defense Information Technology Contracting Organization with software design work, costs a lot -- in part because Microsoft is being asked to license access to its proprietary source code as part of the work.

Galaxy still flying
A smaller contract win, but still significant, was Lockheed Martin's (NYSE: LMT ) receipt of a $27.9 million indefinite-delivery/indefinite-quantity contract to do software work upon Air Force C-5 Galaxy transport aircraft. The Pentagon has caught some flak over continued support for the Galaxy, whose basic design is now close to 45 years old. But the Galaxy remains the largest transport aircraft in the U.S. fleet, capable of carrying a half-dozen MRAPs, or five combat helicopters within its capacious cargo hold.

U.S. Air Force C-5 Galaxy hold. Source: Wikimedia Commons.

The Air Force is currently in the process of upgrading more than four dozen Galaxies under a comprehensive Reliability Enhancement and Re-engining Program. Once completed, the planes will be dubbed "Super Galaxies" -- C-5Ms, equipped with more power, a faster rate of climb, and the ability to operate off of runways 30% shorter than their predecessors require.

Opportunities on the horizon
That's about it for the highlights of last week's Pentagon contracting news, but now what should we be on the lookout for in the future? Well, probably the most interesting bit of news on that front was the announcement Thursday that the U.S. Defense Security Cooperation Agency has informed Congress of plans to sell $4 billion worth of services and equipment to the government of Saudi Arabia, as part of a plan to modernize the Saudi Arabian National Guard forces.

The contractor in charge of the project, Vinell Arabia, isn't exactly a household name here. But as it turns out, Vinell is a subsidiary of marquee defense contractor Northrop Grumman (NYSE: NOC ) .

The upshot: Northrop Grumman's about to land a contract worth 16% of its annual revenue haul for a whole year. The contract hasn't been announced yet. No one knows about it -- except that now, you do.

Boeing operates as a major player in a multitrillion-dollar defense market in which the opportunities and responsibilities are absolutely massive. However, emerging competitors and the company's execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. The Fool's premium research report on the company provides investors with the must-know issues surrounding Boeing. They'll be updating the report as key news hits, so don't miss out -- simply click here now to claim your copy today.

Tuesday, June 9, 2015

Does This Justify Google's Motorola Mobility Acquisition?

Looking back, it was really just a matter of time. Last year's acquisition of Motorola Mobility, for $40 a share, totaling a cool $12.5 billion, was a watershed moment for Google (NASDAQ: GOOG ) . Ostensibly, Google's largest acquisition to date was completed to secure Motorola Mobility's 17,000 patents, along with another 7,500 that were pending approval. The idea was the patents would ward off potential patent-related lawsuits.

But Google CEO Larry Page wasn't fooling anyone; buying Motorola Mobility was a direct means to go after Apple (NASDAQ: AAPL ) and Samsung in the lucrative U.S. smartphone OEM market. Google's partnership with LG has already produced a Nexus smartphone, and Motorola has some, too, but that's so un-Google. If we've learned anything over the past couple of years, it's that Google isn't afraid to aggressively enter new markets with guns blazing: Google Fiber, the use of white space for wireless connectivity, self-driving cars, Glass -- the list goes on and on.

So, when is Google -- via its Motorola Mobility unit -- going to get to work manufacturing its own high-end smartphone, and get serious about taking on Apple? Turns out, that time is nearly here.

Get ready for Moto X
Motorola has a suite of smartphone alternatives, of course; its RAZR phone was once a cutting-edge mobile device. But as Apple's iPhone and Samsung's Galaxy line of phones hit the streets, Motorola's share of the domestic smartphone pie continued to shrink -- down to an 8.5% market share in March of this year, from 9.1% the end of 2012. Google doesn't take losing lightly. The answer? Step up to the plate with its own premium Motorola Mobility phone, manufactured right here in the U.S.

As we learned through an interview with Motorola Mobility CEO Dennis Woodside at the All Things Digital conference, the manufacturing of the Moto X phone -- which will sport a new design, using two batteries to save power, and possibly incorporate sensors to predict users' needs -- will be outsourced, but it's Google-backed Motorola Mobility, through and through. As Woodside put it, "We're trying to bring Motorola back to its roots." And maximize the $12.5 billion purchase price, while at the same time going after Apple's share of the domestic smartphone market? You can bet on that.

The target date for rolling out the Moto X is this October and, like Apple and its iMacs, Moto X will be made in the USA -- just outside Fort Worth, Texas, to be precise. Moto X will generate about 2,000 local jobs, too.

Google is also exploring ways to incorporate cutting-edge technologies into its Moto X smartphone, including electronic tattoos and wearable devices to confirm a Moto X user's identity. As Google continues to push the envelope, and combines its drive for innovation with taking ownership of its own OEM devices, who knows where its smartphone will end and an all-in-one mobile device begin? A lack of innovation has been mentioned time and again as one reason Apple's share price has declined so dramatically lately. That's not likely to be a problem for a Google-driven Motorola Mobility device.

Unseating Apple in the U.S. isn't going to happen overnight, if it happens at all. With 39% of the domestic smartphone market as of Q1 of 2013, Apple actually stretched its lead over Samsung (at least in the U.S.). Not surprisingly, Google's Android continues to rule the OS roost, running 52% of all Americans' smartphones in Q1. Google's OS market domination, along with its willingness to push technology to new heights, bode well for Google's latest foray. Maybe Page knew what he was doing when he plopped down $12.5 billion for Motorola Mobility, after all.

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Monday, June 8, 2015

Google to Help Developers Add Gaming, Location and More to Android Apps

Continuing a string of announcements from its I/O developer conference, Google (NASDAQ: GOOG ) on Thursday announced changes to its Google Play services that will span four major areas for developers and users.

Google Play services (version) 3.1 changes affect gaming, location, messaging, and notifications settings. In gaming, the search giant introduces achievements, leaderboards, multiplayer, and saving (so users can pick up the game where they left off on a different device). On location, Google has made it easier to build "efficient location-aware apps" with three pieces of software. Regarding messaging, Google is making it easier for developers to set up Google Cloud Messaging platform on their apps. Finally, with user notification software, Google is making it easier for developers to synchronize notifications across a user's multiple devices.

This latest version of Google Play is rolling out already, so Android developers can start building better apps with this new software today.

link

Thursday, June 4, 2015

This Week's 5 Smartest Stock Moves

If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.

1. IMAX's big picture keeps getting bigger
IMAX (NYSE: IMAX ) is crossing the border again.

The company behind the projection systems that deliver larger-than-life cinema experiences signed a deal to install five more screens in Mexico for multiplex operator Cinepolis. The move will expand IMAX's presence through Cinepolis in Mexico to a dozen locations.

It's not the only way that IMAX grew its reach. Paramount Pictures expanded its partnership with IMAX, making sure that some of the studio's biggest releases -- including Michael Bay's Transformers 4 and Christopher Nolan's Interstellar -- will screen in the premium-priced format.

Bay and Nolan are also committing to using IMAX cameras to film key action sequences to give filmgoers another reason to pay up for the IMAX screenings when the movies come out next year.

2. Starbucks is a soda jerk
We're not exactly at the point where you can order a fizzy latte, but Starbucks (NASDAQ: SBUX ) is arming some of its Seattle stores with carbonators as it tests sparkling beverages.

Starbucks is offering handcrafted spiced root beer, lemon ale, and ginger ale sodas at the stores. The test locations are also offering to carbonate iced tea and Refresher energy drinks.

It's a smart move, giving Starbucks more beverage options that appeal to children and adults that don't fancy tea or coffee. Starbucks is also doing the right thing by sidestepping the obvious cola and diet cola offerings by rolling out the line with beverage flavors that aren't easy to find elsewhere.

3. Netflix creeps you out
Netflix (NASDAQ: NFLX ) is taking another crack at original programming this week. Flying high off of the critically acclaimed success of February's House of Cards, the Eli Roth-helmed Hemlock Grove is available today exclusively through Netflix's streaming service.

Whether or not the series is a hit, Netflix itself is a hit with at least one analyst.

BTIG analyst Rich Greenfield initiated coverage of the reborn dot-com darling with a bullish rating and a $250 price target this week. It's hard to bet against the company given the stickiness of its flagship streaming platform. The average subscriber is spending nearly an hour and a half a day on Netflix -- according to Greenfield -- making the $7.99 a month plan one of the best value propositions in the entertainment market.

4. Rolling like a burrito
Chipotle Mexican Grill (NYSE: CMG ) is back to beating Wall Street's profit targets.

The 1,458-unit fast casual chain saw net income spike 22% to $76.6 million, or $2.45 a share. There was an tax credit padding results by $0.10 a share, but even then Chipotle blew out the $2.14 a share that analysts were forecasting.

Coming out on top is a welcome surprise. Chipotle was a consistent market beater for years, but it had actually missed Wall Street income expectations in each of the two previous quarters.

Chipotle isn't perfect. Comps rose a pedestrian 1% during the quarter, and guidance calls for flat to slow comps growth for all of 2013 barring any menu price increases.

However, it's still refreshing to see Chipotle getting back to besting the prognosticators on the bottom line.

5. Satellite radio hitchhikes on the information superhighway
Sirius XM Radio (NASDAQ: SIRI ) officially rolled out its MySXM offering this week.

MySXM is the satellite radio provider's crack at Web-based personalized radio. Listeners can choose up to 100 different variations of dozens of Sirius XM stations.

This was a service that Sirius XM was originally hoping to make public by the end of last year, but better late than never.

This is a smart move because it increases the value of its online product. Receiver-based subscribers only have to pay $3.50 a month more for Internet access, so making that add-on offering more compelling should help boost average revenue per user.

Got Chipotle? Get smart.
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Tuesday, June 2, 2015

For Sony, It's Not 'Game Over' -- Yet

Japan Sony Shizuo Kambayashi/APSony CEO Kazuo Hirai Investors will no longer be rewarded for holding on to shares of Sony (SNE). The Japanese consumer electronics titan is holding off on paying a dividend this fiscal year. It's the first time that Sony won't be declaring a dividend since going public in 1958. There's a lot of history in that time. The company that got its start in 1946 as an electronics shop in a department store building would go on to usher in an era in which Japan became known as an exporter of quality consumer electronics. From televisions to camcorders to video game systems, Sony either pioneered new trends or hopped on existing ones and raised the bar. Steve Jobs, Apple's (AAPL) visionary, credited Sony as having been his inspiration in his youth. This is the company that ushered in the era of portable media players with the Sony Walkman in 1979, following that up a couple of decades later by leading the development of the Blu-ray optical disc platform that gives video buffs a hi-def viewing experience. Sony was great. It's not doing so well these days. Getting It Wrong Sony has bet on the losing side before. Its Betamax platform faltered when the market favored VHS. Its memory stick solution never took off relative to SD cards in the realm of data storage. However, it has been able to overcome its past miscues by rocking nearly everywhere else. It's a different scene these days. Sony has posted losses in all but one year since 2008, and fiscal 2015 is shaping up to be another year of red ink. Sony just warned that it's looking at a loss of nearly $2.15 billion, fueled largely by an impairment charge as it writes down the value of its mobile communications unit. Smartphones were supposed to be the ticket for Sony to rejuvenate its fading electronics arm, but Sony's been no match for nimbler and more effective players outside Japan. This has been a rough year for Sony. It sold off its unprofitable PC unit and it spun off the horrific television business, which hasn't posted an annual profit in the past decade. Earlier this year it shuttered most of the Sony stores in this country. Why not? It's not as if Sony has a lot of consumer electronics to sell in a world where VAIO PCs are gone -- and its TV business will likely be sold off if it's not discontinued. Holding On to What It's Getting Right Things aren't all terrible at Sony. After falling behind the Wii and Xbox 360 in the previous generation of gaming consoles, PlayStation 4 is crushing Wii U and Xbox One. This may not seem like a big deal outside of die-hard gamers, but it could be a way for Sony to begin to rebuild its brand with young teens and millennials who don't necessarily associate the company with quality consumer electronics. Sony is also holding up well on the entertainment front. In its prime, Sony began to expand into movie studios and record labels. The music industry has been a challenging niche since folks began to swap MP3 files, but the video industry is benefiting from the digital revolution in which content creators can benefit beyond theatrical and retail physical media distribution. All of this may not be enough. Sony brought in a new CEO two years ago, choosing to go with cost-cutting insider Kazuo Hirai as its new helmsman. Losses continue despite his initiatives, but there's always the hope that he's making the hard decisions now to cut loose money-draining divisions. The layoffs and subsidiary trimming may not be helping morale, but there are enough parts that are still working to serve as a foundation. The challenge here is for Sony to stop the bleeding. A turnaround can't begin until losses turn into profits. We're not there yet, and Sony may never get there. . More from Rick Aristotle Munarriz
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Monday, June 1, 2015

Here's Why Buying Oracle on the Pullback Makes Sense

In 2008, Oracle's (ORCL) CEO, Lawrence Ellison, called cloud computing a "nonsensical" concept, and had absolutely no strategy for maneuvering the company in that direction. Five years hence, cloud computing has become an indispensable tool for huge companies seeking a sophisticated IT support system.

Competitors Are Taking Oracle's Share of the Pie

Additionally, investors in Oracle have recently become conscious of its growing competition. As this article points out, Oracle's revenue growth is quite petty when compared to high growth achieved by its major rivals. Workday's revenue grew 61% year-over-year to $91.6 million with major contribution from subscriptions for its cloud applications.

Oracle claimed in its earnings call that its cloud business was growing at a faster pace than Workday, which is a relatively smaller player in terms of resources and customer base. However, it is a fact that Workday has shown phenomenal growth in subscriptions for its cloud business. Besides strong business fundamentals, it has a maintained healthy operating margins and adequate cash on its balance sheet.

One of Oracle's arch-rivals, SAP (SAP), has been experimenting with various cloud strategies and trying to incorporate a business suite to the cloud of late. In its recent results, it announced growth of 25% in software and cloud subscription revenue. Its revolutionary HANA platform has been driving excellent growth in the past few quarters. In the first quarter, HANA tripled its revenue as compared to same period last year, that testified to its potential to make it big in the industry. Oracle's weaker than expected results negatively affected SAP's share price as investors grew apprehensive on the industry's prospects.

Partnering with Salesforce.com

Oracle's CEO Larry Ellison announced an alliance with Salesforce.com (CRM) last year in order to strengthen its foothold in the cloud computing sphere and said that it would be a partner in the company's latest 12c technology. The company was in the news recently for its acquisition of ExactTarget, which provides marketing solutions in the form of SaaS, for a whopping $2.5 billion. There has been no monetary ascertainment of the value this deal will bring to Salesforce, but it will surely provide adequate leverage to the company in providing marketing solutions in the form of SaaS.

From Different Angles

Oracle is currently working on new business propositions, including the cloud, that are going to rattle its CEO's previous line of thought. The issue with the company is that there is no simple input-output relationship, making it difficult to analyze the stock with defined methods or metrics. I have outlined a few points that investors need to look out for:

A major part of Oracle's earnings call was focused on software which camouflaged the poor performance of its hardware business. Its hardware system product revenue declined 23% year over year. The future still looks bleak with regard to hardware revenue, which, as per management, is expected to grow anywhere between negative 6% and 2% in the next quarter

As mentioned on the earnings call, Oracle has partnered with industry leaders Microsoft and Salesforce.com in order to reshape its cloud computing applications. This combined effort should have positive implications for Oracle's cloud business besides the presence of its much talked-about 12c technology.

The decline in share price after the earnings call has made it a reasonable buy when compared to its peers. At a forward P/E of around 9, Oracle is cheaper than rivals like Salesforce.com

Is It the Time to Buy?

While the wheels are turning at Oracle, management has given out big gifts like a doubled dividend and massive buyback to its shareholders for remaining patient and optimistic. The time is ripe to invest in the company because it has massive opportunities in the future and is reasonably cheap.

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