Category Archives: stocks

Yahoo Could Fetch Less Than Expected; Stock Falls

Yahoo ( YHOO ) stock fell Friday on speculation the Web portal’s buyout offers might be less than half of what most observers had been expecting, amid a second round of bidding. Yahoo stock fell 1.4% to 36.50 in the stock market today .  That gives it a market valuation of roughly $35 billion, but almost all of its value is comprised of big stakes in China e-commerce giant Alibaba ( BABA ) and in Tokyo-listed Yahoo Japan. Verizon Communications ( VZ ), which bought AOL last year, has been viewed as the front-runner to buy Yahoo, although private equity firms have also been kicking the tires. There’s been speculation that Microsoft ( MSFT ), which has a search partnership with Yahoo, could team with a private-equity firm, or that Warren Buffett’s Berkshire Hathaway ( BRKB ) might back a bid by Quicken Loans founder Dan Gilbert. Some early estimates put possible bids in the $5 billion to $8 billion range for the core Yahoo business, which excludes Alibaba and Yahoo Japan. As many as 10 bidders have taken part in presentations led by Yahoo CEO Marissa Mayer, according to reports. The Wall Street Journal, however, reported late Thursday that some PE firms might offer as little as $2 billion to $3 billion, or not bid at all. And Verizon, too, might offer a lower bid, says the report, citing unidentified people familiar with the matter. Yahoo has set a deadline in the first week of June for the next round of bids. Verizon, which bought AOL in 2015 for $4.4 billion, aims to morph into a digital media company that garners more advertising revenue, as wireless data competition mounts.

Qunar’s Airline Battle Won’t Slug No. 1 Chinese Agency Ctrip: ITG

Qunar ‘s ( QUNR ) ongoing dispute with China’s airlines won’t hurt China’s No. 1 online travel agent Ctrip.com ( CTRP ), which is expected to report March-quarter travel sales that doubled vs. last year, ITG analyst Henry Guo said. Ctrip and Qunar stocks split on the stock market today , with shares of Ctrip 1.7%, as Qunar fell 1.5%. IBD’s 11-company Leisure-Travel Booking industry group was up a fraction. For Q1, Guo expects Ctrip to report 4.19 billion to 4.29 billion yuan ($640 million to $650 million), topping the consensus view for 4.16 billion yuan. Ctrip hasn’t yet set a date for its Q1 earnings release. That outperformance would follow a months-long battle with flagship carrier Air China — along with some other local airlines including Hainan Airlines and its Hong Kong Airlines unit, as well as China Eastern’s Shanghai Airlines — over fees charged by booking agents such as Qunar. Ctrip acquired a stake in Qunar after the two formed a partnership last year. In the wake of airlines’ refusal to list on Qunar.com, the site now directs users to Ctrip.com or to airlines’ official websites, Guo wrote in a research note. “We believe this should help drive Ctrip’s organic transportation revenue growth and partially offset Qunar’s air-ticketing weakness,” he wrote. Hotel occupancy in China fell to 53.1% in Q1 from 53.6% in the prior quarter, Guo said, but revenue per available room surged 2.2% year over year, “suggesting improved monetization for the whole hotel industry.” At the same time, he says  InterContinental Hotels Group ( IHG ) and Hilton Worldwide ( HLT ) reported 8.3% and 8% year-over-year growth for their Chinese operations, respectively, and Marriott International ( MAR ) saw revenue per available room in Asia rise 6.8% vs. last year. Guo expects Ctrip to report a 76% to 86% jump in accommodations sales vs. the year-earlier quarter, topping the company’s guidance for 70%-80% growth. He sees Ctrip’s travel segment more than doubling revenue. Packaged tours — one of Ctrip’s growth engines — has benefited from outbound travel to high-demand destinations like Japan, South Korea and Southeast Asia, Guo wrote. Relaxed visa requirements have helped fuel outbound travel. He expects 52% year-over-year growth in this segment.

How High Will Tesla/Apple Supplier Nvidia Go? Up 34% In 2 Months

Loading the player… Nvidia ( NVDA ) — chip supplier for  Apple ( AAPL ) and Tesla Motors ( TSLA ) — has been on a huge run lately, gaining more than 30% in the past two months. But how much higher can the top-rated stock go? While Nvidia is probably best known for being a Tesla partner, it has also supplied graphics chips for Apple computers and is involved in the budding virtual reality market. Jefferies is bullish on the stock and said last week that Nvidia is just starting to benefit from trends in the auto, data center, PC gaming and VR markets. The analyst believes the company can more than triple its annual EPS in three years. Nvidia broke out of a cup-with-handle base about eight weeks ago and pulled back to find support at the 50-day line. It then surged to a new all-time high and profit-taking zone after its view-topping quarterly report last week and has continued higher since. It’s now up about 34% from the buy point and rose 1.8% Friday. Top-Rated Peers Performing Well Nvidia has a highest-possible IBD Composite Rating of 99. Two of its highly rated chip peers have also been performing particularly well as of late: Silicon Motion ( SIMO ) and MaxLinear ( MXL ). Silicon Motion broke out of a big cup-with-handle base in March and is now trading in profit-taking territory and at all-time highs. Its stock climbed 3.8% on the stock market Friday. MaxLinear broke out of a consolidation base last week and is trading in buy range. It rose 1.7% Friday.