Daniel Cullinane CPA
25 Plaza 5 25th fl Jersey City NJ phone 732-516-1648 fax 732-516-9778
A search product has passed a predominantly hardware product to become the world’s most valuable brand. In a new study, Google, owned by Alphabet Inc. (NASDAQ: GOOGL), had a brand value of $302 billion, compared to Apple’s (NASDAQ: AAPL) $301 billion. No other brand was even close.
The analysis is from global brand consultancy BrandZ.
The third and fourth brand values were also almost tied. Amazon.com Inc. (NASDAQ: AMZN) had a brand valuation of $208 billion to Microsoft Corp.’s (NASDAQ: MSFT) $201 billion. Rounding out the top 10, China’s Tencent’s valuation was $179 billion, followed by Facebook Inc. (NASDAQ: FB) at $162 billion, Visa Inc. at (NYSE V) at $146 billion, McDonald’s Corp. (NYSE: MCD) at $126 billion, Alibaba Group Holding Ltd. (NYSE: BABA) at $113 billion and AT&T Inc. (NYSE: T) at $106 billion. No other brand value topped $100 billion.
BrandZ commented on the rise of Chinese companies:
This was the first year non-US brands grew faster than US brands. Fourteen Chinese brands appear in the Top 100 ranking compared to just one (ChinaMobile) in 2006. The total value of China’s Top 10 grew year-on-year by +47%, more than double that of the US brands (+23%).
Among the top 20 brands with surges in valuation, Amazon was up 45%, Tencent by 65% and Alibaba by 92%.
Among the top 20 global brands, several lost ground in terms of valuation. AT&T fell 7%. International Business Machines Corp. (NYSE: IBM) was down 6% to $96 billion, and Verizon Communications Inc. (NYSE: VZ) lost 5% to $85 billion. Marlboro and Wells Fargo & Co. (NYSE WFC) each lost 6%, to $82 billion and $55 billion, respectively.
The brand that lost the most value was troubled General Electric Co. (NYSE: GE), which was down 22% to $39 billion.
The combined value of the top 100 rose 21% to $4.4 trillion, which means that Google and Apple represented 14% of the total.
Brandz’s methodology is opaque:
A BrandZ™ ranking of brand valuations lists the brands making the largest absolute $ contribution to the total value of their respective parent companies, considering both current and projected performance. This is the true value of brand building and we want to isolate and reward the brands making the largest contributions to the success of their parent companies. A company may have huge overall business value but the absolute $ contribution made by the relevant brand(s) that the company owns may not be a comparatively large figure – at least not a large enough figure to qualify for the given BrandZ™ ranking of brand values.
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ANALYSTS' UPGRADES & DOWNGRADES
After a research firm criticized one of Amazon’s (NASDAQ: AMZN) suppliers in China, the supplier will review its labor practices. According to Reuters:
Contract manufacturer Foxconn said on Sunday it is investigating a plant in China that makes devices for Amazon.com Inc (AMZN.O), after a U.S. watchdog group criticized what it described as harsh working conditions at the factory.
A 94-page report by New York-based China Labor Watch that followed a nine-month investigation cited excessive hours, low wages, inadequate training and an overreliance on “dispatch” or temporary workers in violation of Chinese law at the Hengyang Foxconn plant in Hunan province, which makes Echo Dot smart speakers and Kindle e-readers.
KKR is expected to make another large M&A deal. According to The Wall Street Journal:
KKR & Co. is nearing a deal to buy Envision Healthcare Corp. for $46 a share, or about $5.5 billion, according to people familiar with the matter, in one of the largest recent leveraged buyouts.
The Nashville, Tenn., provider of physician services to hospitals and other health-care facilities has been conducting an auction after announcing a strategic review last fall. A deal with the private-equity firm is expected to be announced Monday, the people said.
There was a new No.1 film at the box office last week. According to Box Office Mojo:
With an estimated $41.5 million, WB’s Ocean’s 8 topped the weekend box office and outperformed pre-weekend industry expectations, which anticipated an opening in the mid-thirties, though fell a little short of Mojo’s pre-weekend forecast, which saw potential for a debut over $45 million.
An investigation of Bitcoin chopped it value. According to the FT:
Bitcoin tumbles to two-month low in wake of futures probe. Cryptocurrency falls as much as 11.5% after report that regulators are examining possible manipulation
One of China’s huge telecom companies announced a huge loss. According to The Wall Street Journal:
Chinese smartphone and gadget maker Xiaomi Corp. lost money in the first three months of the year, the company revealed in new filings ahead of its coming stock listing that is expected to value the company at about $70 billion.
Xiaomi said it lost 7 billion yuan ($1.1 billion) in the first quarter, on revenue of 34.4 billion yuan, due to one-off accounting charges. Excluding those charges, the company reported a profit of 1.7 billion yuan, boosted by an 88% rise in smartphone sales during the quarter.
Apple Inc. (NASDAQ: AAPL) released new guidelines for its iOS devices, which effectively outlaws “mining” cryptocurrencies. These new rules will restrict apps that drain battery, generate excessive heat, or put unnecessary strain on the device.
Cryptocurrency “mining” is incredibly rough on any device, generating a significant amount of heat and strain. Essentially, Apple is making this change for the “safety” of its users and their devices.
Apple gave one of the highlights from its guidelines as:
2.4 Hardware Compatibility
2.4.2 Design your app to use power efficiently. Apps should not rapidly drain battery, generate excessive heat, or put unnecessary strain on device resources. Apps, including any third party advertisements displayed within them, may not run unrelated background processes, such as cryptocurrency mining.
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Under the cryptocurrency section of Apples app guidelines:
3.1.5 (b) Cryptocurrencies:
(i) Wallets: Apps may facilitate virtual currency storage, provided they are offered by developers enrolled as an organization.
(ii) Mining: Apps may not mine for cryptocurrencies unless the processing is performed off device (e.g. cloud-based mining).
(iii) Exchanges: Apps may facilitate transactions or transmissions of cryptocurrency on an approved exchange, provided they are offered by the exchange itself.
(iv) Initial Coin Offerings: Apps facilitating Initial Coin Offerings (“ICOs”), cryptocurrency futures trading, and other crypto-securities or quasi-securities trading must come from established banks, securities firms, futures commission merchants (“FCM”), or other approved financial institutions and must comply with all applicable law.
(v) Cryptocurrency apps may not offer currency for completing tasks, such as downloading other apps, encouraging other users to download, posting to social networks, etc.
Shares of Apple were last seen at $191.43, with a consensus analyst price target of $198.48 and a 52-week range of $142.20 to $194.20.
JUNE NEWSLETTER 2
Copyright © Daniel Cullinane CPA.
2500 Plaza 5 25th fl Jersey City NJ 07311 phone 732-516-1648 fax 732-516-9778
The futures are trading slightly higher Monday morning as investors are hoping for another solid week like the one the markets produced last week, when both the NASDAQ and the Russell 2000 hit new all-time highs. With the second quarter starting to wind down, some of the companies that will be reporting in July could start releasing earnings warnings, so it pays to stay alert now.
Some investors are reconsidering what the nine-year bull market may bring for the rest of 2018 and beyond. It has become very clear that the multiyear trend of buying pullbacks is now more vulnerable to sellers, volatility, and each major news headline. Many investors are finding it harder to decide how they want their assets positioned for the longer term.
24/7 Wall St. reviews dozens of analyst research reports each day to find new investing and trading ideas for our readers. Some of the top analyst reports cover stocks to buy. Other analyst calls cover stocks to sell or stocks to avoid.
Additional color and commentary has been added on some of these daily analyst calls. The consensus analyst price target data are from the Thomson Reuters sell-side research service.
These were the top analyst upgrades, downgrades and other research calls from Monday, June 11, 2018:
Altria Group Inc. (NYSE: MO) was started with an Equal Weight rating at Consumer Edge with a $61 price target. That compares with a consensus target on Wall Street of $69.31. The shares ended trading Friday at $57.71.
Apache Corporation (NYSE: APA) is raised to Buy from Hold at Argus with a $56 price target. That competes with the Wall Street consensus target of $46.19. The 52-week trading range for the company is $33.60 to $51.21. The stock closed Friday at $42.24.
Cimarex Energy Co. (NYSE: XEC) is raised to Buy from Hold at Jefferies. The 52-week trading range for the exploration and production company is $82.40 to $130.16. The Wall Street consensus price objective is set at $126.94. The shares ended trading Friday at $85.59.
ConocoPhillips (NYSE: COP) was started with an Outperform rating at BMO Capital Markets with a $74 price target. The Wall Street consensus target for the oil giant is set at $74.35. The shares ended trading Friday at $69.43.24/7 Wall St.
12 American Companies That Control Tech
Euronet Worldwide Inc. (NASDAQ: EEFT) was downgraded to Neutral from Buy at Goldman Sachs. It has a $94 price target, which compares with the consensus target across Wall Street of $105.29. The stock ended trading on Friday at $85.98.
First Data Corporation (NYSE: FDC) is raised to Buy from Neutral at Goldman Sachs, with a $25 price objective. The Wall Street consensus target is posted at $22. The shares have traded in a 52-week range of $14.73 to $20.58. The stock ended trading Friday at $20.05.
Match Group Inc. (NASDAQ: MTCH) is raised to Buy from Hold at Jefferies. The 52-week trading range for the online dating giant is $16.57 to $47.85. The consensus price target across Wall Street is set at $43. The stock closed Friday at $41.52.
NXP Semiconductor N.V. (NASDAQ: NXPI) was downgraded to Hold from Buy at SunTrust with a $119 price target. The Wall Street consensus price target for the shares is $120.82. The company is being purchased in a massive $44 billion deal by Qualcomm, so this may just be a valuation call. The stock ended trading on Friday at $120.17.
Oasis Petroleum Inc. (NYSE: OAS) was downgraded to Hold from Buy at Jefferies, with a $14 price target. The Wall Street consensus target is set at $14.56. The shares closed trading on Friday at $12.86.
SemGroup Corporation (NASDAQ: SEMG) was downgraded to Market Perform from Outperform at Wells Fargo. The 52-week trading range is $20.20 to $30.95. The consensus price target for the company is posted at $26.80. The stock ended trading Friday at $25.
Other key analysts upgrades and downgrades were seen in the following:
DTE Energy Inc. (NYSE: DTE) was downgraded to Market Perform from Outperform at Wells Fargo with a $103 price target. That compares with the Wall Street consensus target of $109.27. The shares closed Friday at $96.97.
Incyte Corporation (NASDAQ: INCY) was raised to Outperform from In-line at Evercore ISI. The 52-week trading range for the company is $60.23 to $140.11, and the consensus price target is posted at $81.29. The stock closed Friday at $70.01, and the shares are trading up in pre-market action.
Keane Group Inc. (NYSE: FRAC) was started at New Buy at Goldman Sachs with a $21.50 price target. That compares with the consensus price target of $21.78. The 52-week trading range for the oil field services company is $12.51. To $19.83. The shares closed Friday at $13.53.
Kosmos Energy Ltd. (NYSE: KOS) is raised to Buy from Hold at Jefferies. The 52-week trading range is $5.15 to $8.62. The consensus price target is posted at $8.78. The shares closed Friday at $7.95.
Olin Corporation (NYSE: OLN) was downgraded to Sector Perform from Outperform at RBC Capital Markets. The 52-week trading range is $27.79 to $38.854. The consensus price target for the company is set at $338.57. The stock closed Friday at $33.06.
Park Hotels and Resorts Inc. (NYSE: PK) was downgraded to Sell from Neutral at Goldman Sachs. The 52-week trading range for the shares is $23.91 to $32.92. The consensus price target is $30.96. The stock closed Friday at $31.60.
Seattle Genetics Inc. (NASDAQ: SGEN) is raised to Buy from Hold at SunTrust. The 52-week trading range for the biotech company is $45.31. To $66.94. The consensus price target is set at $65.67. The stock ended trading on Friday at $65.01.
SunPower Corporation (NASDAQ: SPWR) was downgraded to Neutral from Outperform at Baird. The 52-week trading range for the shares is $6.46 to $11.70. The consensus price objective is $8.13. The stock closed Friday ay $7.05.
In case you missed it, here are last Friday’s Analyst Upgrades and Downgrades.
They included ConocoPhillips, Domino’s Pizza, Eli Lilly, Occidental Petroleum, PayPal, Penn National Gaming and more.