Wall Street to Main Street: News, Views and Commentary: April 10, 2006
It’s 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 observe 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 calculate is $ .572 compared to an EPS of 58 cents a year ago, CKE Restaurants (NYSE: CKR) the calculate is $0.178 compared to an EPS of 12 cents a year ago, Cascade Corp (NYSE: CAE) the calculate is $0.693 compared to an EPS of 37 cents a year ago, Genetech, Inc (NYSE: DNA) the calculate is $0.413 compared to an EPS of 29 cents a year ago, Rite Aid (NYSE: RAD) the calculate is $0.024 compared to an EPS of 6 cents a year ago, Shaw Group, Inc (NYSE: SGR) the calculate is $0.369 compared to an EPS of 15 cents a year ago, Topps Company (NASDAQ: TOPP) the calculate is $0.043 compared to an EPS of 1 cent a year ago.
We’ll list the companies of observe that are reporting this week as their hits and misses may have some effect on their sectors.
Now one of the companies that we keep up 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 divided. 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 noticeable to approximately 538 million. already after a divided Lehman will nevertheless have legs as mergers and acquisitions will continue in 2006. This holds true for another company that we keep up 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 divided.
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. It’s not just about cable television any longer, it’s 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 proportion 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 in addition 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 [http://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 assistance.
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 jump 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 possible 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 buy they own that copy and can play it where they please.
They are using an encryption course of action 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 assistance 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 obtainable via a kiosk located in the store.
This innovation would eliminate the costly course of action of producing the DVD’s 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 buy a new television, it’s 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.
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