stocks



Undervalued US stock indexes

Morningstar shows the performance  of the US stock indexes by sector, for the last 5 years.  For Infocom Intelligence, three major sectors are more undervalued: technology, basic materials and energy (sectors in green). Since we are in the middle of the growth stage of the US economy, the technology sector will first benefits from expansion, followed by later stages’ growth, which are more cyclical (commodities, such as basic materials and energy).  At the end of economic growth cycle, shorter supplies are pushing the price of commodities, and it boosts the profits of producers.

index performance by sectors

Louis Rhéaume

Editor, Infocom Analysis

louis@infocomintelligence.com

 



“DHX Media Benefits From Growth In Value Of Children’s Programming In A Digital World” is available on Seeking Alpha

 

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http://seekingalpha.com/article/1404701-dhx-media-benefits-from-growth-in-value-of-children-s-programming-in-a-digital-world

  • Analysts’ recommendation
  • International agreements
  • Growth of digital activities
  • Risks
  • DHX Media Revenues breakdown (TTM)

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

“Google gagnera la bataille de la publicité en ligne contre Facebook” est disponible sur LesNews.ca

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http://lesnews.ca/technologie/43054-selon-forrester-google-va-gagner-la-bataille-de-la-publicite-en-ligne-contre-facebook/

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

“DHX Media veut jouer dans la cour des grands” est disponible dans le journal Les Affaires

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L’action du plus grand producteur et diffuseur indépendant de contenus télévisés pour enfants DHX Media (DHX.TO) a beau avoir explosé de 160% l’an dernier, elle continue de séduire certains financiers.  L’article est disponible dans le journal Les Affaires, version papier.

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

Article on WiLAN available on Seeking Alpha

wilanlogo

WiLAN (WILN) is a Canadian intellectual property firm that offers new opportunities for both value and growth investors. WiLAN has a vast and strategic portfolio of patents that were built or acquired. WiLAN has more acquired patents than big players such as Apple, Samsung or Google. Patent monetization is booming with a lot of new cases reaching settlements. In the ITC sector, patent wars among cellphone manufacturers are widely followed by the press. The Global unlicensed communications equipment market represents a huge untapped $1.5 trillion opportunity. WiLAN’s experienced management team wants to benefit from the growing communications patent wars actually evolving. Among the recent developments, the firm has started 5 new litigation claims of patent infringement, insiders have been buying the stock throughout last year, and WiLAN has signed two new licensed deals.

To read the whole article go to : http://seekingalpha.com/article/1206471-wilan-is-benefiting-from-communications-patent-wars

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

It is the Best Time to Invest More in Tech Stocks

According to RBC, the Information Technology stocks are often very cyclical. The companies depend on capital spending and business or consumer demand, which can be quite finicky. The stocks may also have long-term growth potential as new technologies are developed. Technology stocks are usually popular during early to mid stages of an economic expansion.

We are at the end of a recession in the USA and Canada is in an early stage of a moderate economic expansion.  Mobile and social networks are driving the Internet economy.

RBC_40049-Fig-7-Econom-4D365C

I believe Tech stock funds might also lead the next bull market.  For instance , the Vanguard Information Technology ETF has a 8.58% return in the past 3 months. The tech companies that have survived the past decade are surprisingly strong, and their stocks are relatively cheap.

Investing in technology can be very lucrative, as Bill Gates or Larry Page could tell you. But for every Microsoft or Google, there are a dozen Wang Laboratories and Digital Equipment Corporations, all of which have disappeared. The companies that have survived, however, have emerged both saner and stronger and many firms changed their business models. One of these change is that: many companies now rely as much on revenue from maintaining their existing products as they do from selling new products.  Oracle is gaining greater revenue from its maintenance services. New software licenses are down, but it is still getting plenty of income from maintenance fees.  Constellation Software in Canada is also getting greater recurring revenues.  While some ITC firms are becoming more predictable and less risky in the long-term, many are still cyclical stocks depending on new product launches to keep the growth.

Another big change: many ITC firms have now a lot of cash and hold relatively little debt.  And many technology companies have experience with deflation — a period of falling prices. Even though deflation is a relatively rare economic problem, tech prices are almost always falling. The most successful companies have learned how to make money even when cutting prices.

Many tech stocks are still cheap, and those that have survived are far stronger than they were during the 1990s.

For more tech stocks advise, such as portfolio assessment and stock selection, you can contact me.

For more information on changes in technology business models and consulting advises, you can read my chapter of a book: “Advances in Communications and Media Research. Volume 8″,  with Dr. Yves Rabeau of UQÀM.

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

5 titres favoris de la techno pour les dividendes et la croissance

Mon dernier article sur “5 titres favoris de la techno pour les dividendes et la croissance” est disponible dans la section Investir du journal Les Affaires d’aujourd’hui.

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

“4 Mobile Advertising Stocks That Can Benefit From A $12 Billion U.S. Market By 2016″ is available on Seeking Alpha

http://seekingalpha.com/article/888051-4-mobile-advertising-stocks-that-can-benefit-from-a-12-billion-u-s-market-by-2016

about: GOOG, includes: AAPLFBMMP

Louis Rhéaume

Infocom Analysis

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

11 best books for stock investing

Here is a recommendation from Bill Ackman, hedge fund manager, about some of the 11 best books on stock investing.

I read those of Graham (value investing) and Lynch (Growth investing) and the books are very useful.

Louis Rhéaume

Infocom Intelligence

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

3 stocks expected to gain from the 2012 Internet Trends of Mary Meeker from Kleiner Perkins

According to Mary Meeker, partner at Kleiner Perkins, the magnitude of upcoming Internet changes will be stunning: “We are still in spring training”.  She suggests those Internet trends:

  • Nearly Ubiquitous High-Speed Wireless Access in Developed Countries
  • Unprecedented Global Technology Innovation
  • Ultra Competitive Markets for Mobile Operating Systems + Devices
  • Broadly Accepted ‘Social Graphs’ / Information Transparency
  • Fearless (& Connected) Entrepreneurs
  • Difficult ‘What Do I Have to Lose’ Economic Environment for Many
  • Available (& Experienced) Capital
  • Fearless (& Connected) Consumers
  • Inexpensive Devices / Access / Services (Apps)
  • Ability to Reach Millions of New Users in Record (& Accelerating) Time
  • ‘Social Emerging as Starting Distribution Point for Content,’ (Brian Norgard, Chill)
  • Aggressive (and Informed) ‘On My Watch’ Executives at ‘Traditional’ Companies
  • Unprecedented Combo of Focus on Technology AND Design
  • Nearly ‘Plug & Play’ Environment For Entrepreneurs – Marketplaces / Web Services / Distributed Work / Innovative Productivity Tools / Low ‘Start Up’ Cost
  • Beautiful / Relevant / Personalized / Curated Content for Consumers

It appears that the historical wealth creation in tech companies has been very concentrated.  Thus, around just 2% of companies in tech IPOs accounted for around 100% of net wealth creation in the 1,720 Tech IPOs in USA, for the period 1980-2002. Source: The Technology IPO Yearbook: 9th Edition – 23 Years of Tech Investing, Morgan Stanley.  Thus, picking winners in tech IPO is very uncertain. 

Internet and mobile advertising

Internet ad spending represents around 22% of total ad spend. It is catching up with time spent online, 26% of total media time. That ratio is fairly comparable to old mediums like TV (43/42) and Radio (15/11). However, the discrepancy time spent on mobile online with mobile advertising is still huge (10 vs 1%).  According to Meeker, there is a $20B+ opportunity just in USA both for Mobile and Internet advertising.

Internet advertising revenues for the first quarter of 2012 set a new record for the reporting period at $8.4 billion, according to the latest IAB Internet Advertising Report from the Interactive Advertising Bureau (IAB) and PwC U.S. It is the highest first-quarter revenue ever measured by the IAB and PwC and a $1.1 billion–or 15 percent increase–over the $7.3 billion figure reported in the first quarter 2011.

“More online consumers than ever are taking to the internet to inform and navigate their daily lives—by desktop, tablet or smartphone,” said Randall Rothenberg, President and CEO, IAB. “Marketers and agencies are clearly–and wisely–investing dollars to reach digitally connected consumers.”

“Digital media captures consumers’ imaginations, and marketers increasingly turn to interactive advertising to successfully speak to their customers,” said Sherrill Mane, Senior Vice President, Research, Analytics & Measurement, IAB.

“The year-over-year growth between Q1 2011 and Q1 2012 sets quite a milestone,” said David Silverman, Partner, PwC U.S. “Moreover, a 15 percent increase over the comparable period in 2011 is a solid affirmation the internet is delivering on its promise to attract consumers and the advertising dollars that follow.”

The following chart tracks first quarter ad revenue since 1996; dollar figures are rounded.

Who could benefit from this $20B+ opportunity in the USA?

I can name some three important players: Google (GOOG), Milllennial Media (MM) and Facebook (FB).

  • Those firms are offering Beautiful / Relevant / Personalized / Curated content for consumers through tailored advertising, on both fixed Internet and mobile Internet.
  • Those advertisers can play the role of efficient infomediation players.
  • Millennial Media just had its first public quarter.  The price of the stock is down 67% from day 1 of the techy IPO.
  • Google has an attractive P/E ratio of 17X and has around 90% of its revenue from advertising.  Google is largely dominating mobile search with a market share above 95%.
  • Facebook stock is up 20% in the last 2 weeks. For the potential and challenges of Facebook you can see this Seeking Alpha article.

 

Louis Rhéaume

Infocom Intelligence

louis@infocomintelligence.com

Twitter: @InfocomAnalysis

 

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