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  Home –› Banking & Finance –› Investment
   
 

Wall Street to Main Street: News, Views and Commentary: April 10, 2006

   

Its Monday April 10, 2006, and this weekend Tiger Woods fell short of getting another Green Jacket as he came in three strokes behind Phil Mickelson, so last years champion became this years presenter as Woods graciously put the Green Jacket on Mickelson.

Earnings season is here again, companies of note that are on tap to report today are Alcoa, Inc (NYSE: AA) they have a conference call set for 5pm today to discuss earnings, Abbot Labs (NYSE: ABT) the estimate is $ .572 compared to an EPS of 58 cents a year ago, CKE Restaurants (NYSE: CKR) the estimate is $0.178 compared to an EPS of 12 cents a year ago, Cascade Corp (NYSE: CAE) the estimate is $0.693 compared to an EPS of 37 cents a year ago, Genetech, Inc (NYSE: DNA) the estimate is $0.413 compared to an EPS of 29 cents a year ago, Rite Aid (NYSE: RAD) the estimate is $0.024 compared to an EPS of 6 cents a year ago, Shaw Group, Inc (NYSE: SGR) the estimate is $0.369 compared to an EPS of 15 cents a year ago, Topps Company (NASDAQ: TOPP) the estimate is $0.043 compared to an EPS of 1 cent a year ago.

Well list the companies of note that are reporting this week as their hits and misses may have some effect on their sectors.

Lehman Brothers

Now one of the companies that we hold in high regard on the NAMC Newswire is Lehman Brothers (NYSE: LEH), the board of directors of the company recently approved a 2 for 1 stock split. The additional shares will be issued as a stock dividend and payable to shareholders of record as of April 18, 2006, it will be issued on or about April 28, 2006. This will bring the number of shares outstanding to approximately 538 million. Even after a split Lehman will still have legs as mergers and acquisitions will continue in 2006. This holds true for another company that we hold in high regard, Goldman Sachs (NYSE: GS), a company that should be trading a lot higher than $161.00.

Our outlook on Lehman Brothers for 2006 is the stock trading between $90.00 and $100.00 post split.

The National Show

The U.S Cable industry is gathering this week in Atlanta, Georgia as the National Show kicks off, an event that is sponsored by the National Cable & Telecommunications Association. Now you would think that only companies like Time Warner (NYSE: TWX), Comcast Cable (NASDAQ: CMCSA), and Cablevision Systems (NYSE: CVC) would be presenting and you would be very wrong. Its not just about cable television any longer, its about the triple play, TV, Voice and Internet.

So phone companies like Verizon (NYSE: VZ), Sprint Nextel (NYSE: S) and AT&T (NYSE: T) will be represented as the cable operators are trying to grab market share from them by offering current phone customers a one-stop shop for all of their communication needs.. But it gets better, Internet companies like Yahoo (NASDAQ: YHOO) and possibly Google (NASDAQ: GOOG) will be represented there as well because they are venturing in other areas as the playing field of Internet, Phone and Television come together.

If you are an investor in cable, Internet or phone companies then you should be interested in this topic as it will have an effect on the companies that you own shares in. Go to www.thenationalshow.com .

Hollywood Needs to Open Their Eyes

In the evolution of the entertainment industry, the development of new technology has opened up many new opportunities for growth, but only those companies that take their heads out of the sand and look at digital downloads as the future will benefit.

Mark Cuban, the owner of the basketball team the Dallas Mavericks and a visionary in his own right, earlier this year tried something that was never done before and released the movie Akeelah and the Bee, which starred Angela Bassett and Laurence Fishburne, as a theatrical release while simultaneously releasing it on cable television as a pay per view. This was the first sneak peek into the future of new movie releases.

The hit movie BrokeBack Mountain which starred Heath Ledger and Jake Gyllenhall, took another step as they simultaneously released the DVD and the digital download of the movie. Now you would think that this would be a big leap for Hollywood, but you would be wrong. The movie download system that they used has limitations to it, as you can only watch is on your computer, it cannot be burned to a DVD.

This all comes out of the fear that Hollywood has of piracy, but that fear is shutting out potential growth in the industry.

Now, lets look at a company that took the bull by the horns and embraced the new technology and is reaping the rewards. The Adult Video Entertainment Leader and privately held Vivid Entertainment is currently offering their customer the opportunity to download movies from their web site and burn them on a DVD which can be played on their DVD player or computer. Once the consumer makes the purchase they own that copy and can play it where they please.

They are using an encryption process that only allows purchasers to burn the movie to a DVD once and it cannot be copied.

Now Vivid Entertainment is involved in the adult entertainment business and is privately held, so we made mention of them because of how they approached the digital download market.

Now, lets talk about a company that that would benefit tremendously by venturing into this area. The company is Netflix (NASDAQ: NFLX), the leader in online DVD rentals, they are currently in a battle with Blockbuster Video (NYSE: BBI) for trademark infringement and could win, but that is not the play. They currently do not offer digital downloads of movies but you can bank on it that they are looking into it deeply. Once they can present something to the entertainment industry that shows a comfortable level of protection from piracy you will see the scope of the entertainment industry change. At that point consumers can expect to see their local DVD rental stores change, digital movie downloads may be available via a kiosk located in the store.

This innovation would eliminate the costly process of producing the DVDs and distributing them, this just adds more profit to the bottom line of the entertainment companies. We see Netflix as the possible leader in this evolution of entertainment.

Two companies in the DVD rental industry to avoid until they come up with a comprehensive plan to adapt are the current leaders in the DVD rental store business Blockbuster and Movie Gallery (NASDAQ: MOVI).

As I repeat this every day, we cannot stress enough that investors need to do their due diligence, call the companies, get the information, consult with your investment advisor and if you do not have one consider getting one. Put the same time into investigating these companies as you do when you go to purchase a new television, its only for your protection. When it comes to thinly traded securities stagger your orders or put a limit order in to avoid a run up.

Disclaimer: None of the information contained on the NAMC Newswire constitutes a recommendation by the NAMC Newswire, its journalist, nor its parent company that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific investors or person. Each individual investor must make their own independent decisions regarding any security, portfolio of securities, transaction, or investment strategy featured on the NAMC Newswire or NAMC Radio Any past results are not necessarily indicative of future performance. The NAMC Newswire, its journalist nor its parent company does not guarantee any specific outcome or profit, and all investors should be aware of the real risk of loss in following any strategy or investments featured on the NAMC Newswire or the NAMC Radio. The strategy or investments discussed may fluctuate in price or value and investors may get back less than you invested. Before acting on any information featured on the NAMC Newswire website or the NAMC Radio segment, investors should consider whether it is suitable for their particular circumstances and strongly consider seeking advice from their own financial or investment adviser. Investors are also urged to do their own due diligence before investing in any security.

All opinions featured on the NAMC Newswire or NAMC Radio are based upon information that is considered to be reliable, but neither the NAMC Newswire, its journalist, its parent company, affiliates nor assigns warrant its completeness or accuracy, and it should not be relied upon as such. The statements and opinions featured on the NAMC Newswire by its journalist are based on their outlook at the time of the statement or opinion, and are subject to change without notice. NAMC may at times hold a position in the companies that it features, in these cases appropriate disclosure is made.

Author: Louis Victor
 
Author Bio:
Louis Victor is a eminent columnist. Louis likes to write articles about this subject.
 
 
 

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