Category Archives: Stocks

The European Commission attacks – again!

Europe are attacking big U.S companies and want more money from them. Last year Europe attacked Google. Now they are attacking Apple. Based on a two-year long investigation, the European Commission has ordered Apple to pay about $14 billion in back taxes for its subsidiaries in Ireland.

$14 billion? Wow!

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Last year, the European Commission EU said that Google was too dominant in three related markets. They also said that Google is using that position to distort competition and the EU claims that Google limits access to key aspects of the Android ecosystem by insisting that phone markers install Google search and Chrome apps.

Not only that. The EU also said that Google block phone makers from producing phones that run alternative versions of Android and that EU also believes that Google has illegally paid makers and other mobile phone companies to preinstall Google search exclusively.

This is not the first time EU has attacked big U.S companies.

In 2001, the European Commission sent a sternly worded missive to Microsoft. EU accused the software maker of having illegally extended its dominance in operating systems for personal computers (PC`s) into adjacent markets, for tying Windows to programs that play music and videos.

The European Commission said Microsoft was too dominant in the market in 2001. Last year they claimed Google was too dominant in the internet search market. Google are now ruling the smart phone market with their Android system.

Now, they are attacking Apple. Not because they are too big, but because they are having a good agreement with Ireland that allows Apple to pay less tax than other businesses. The European Commission has concluded that Ireland must recover the illegal aid.

Commissioner Margrethe Vestager, in charge of competition policy, said: «Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission`s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of 1% on its European profits in 2003 down to 0,005% in 2014.

Apple`s provisions for income taxes outside of the United States amounted to «just» about $5 billion in that period. You can imagine what the amount is if Apple paid an effective tax rate ranging from 1% in 2003 to 0,005% in 2014 on its European profits at that time?

For instance, Apple paid an effective tax rate of 26,1% in the U.S in 2014, with income taxes adding up to almost $60 billion in the period between 2003 and 2014.

But Apple has their own tax structure in Europe, which is Apple Sales International and Apple Operations Europe. Both are two Irish incorporated companies that are fully owned by the Apple group.

Apple Sales International and Apple Operations Europe make yearly payments to Apple in the US to fund research and development efforts conducted on behalf of the Irish companies in the US. These payments amounted to about $2 billion in 2011 and significantly increased in 2014.

The European Commission claims that only a fraction of the profits of Apple Sales International were allocated to its Irish branch and subject to tax in Ireland. The remaining vast majority of profits were allocated to the «head office», where they remained untaxed.

If you are too dominant, they will attack you. If you are too big, they will attack you. If you are too popular, they will attack you. If you don`t pay much tax, they will also attack you. The EU system will find something anyway.

Apple and Ireland both said they disagreed with the record penalty and would appeal against it. What is the end of this story if we face a government that don`t want the money? And is it a problem for a company that made a net profit of $53bn in the 2015 financial year?

What is the next US company to be attacked by Europe?

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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OPPO is growing much faster than its competitors

I remember the first day I bought my first mobile phone. It was in 1992. It was a big black phone and that beast was three times bigger than an ordinary Apple phone. After a few minutes in my conversation, the battery was flat, and I spent hours to fill it up again.

It didn`t take long before I bought a new one; Ericsson from Sweden. Once one of the greatest in the world. I changed the phone onece again, and this time to Nokia from Finland. Also one of the greatest in the world.

 

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Both, Ericsson and Nokia are falling stars. The Americans came into the market and Apple started to rule the world. Not only that. In a short period of time, they became the biggest company in the world. But how is it now?

There is no doubt that China is the largest smartphone market in the world, and Apple is not at the top three. Smartphone shipments in Q2 amounted for 111,2 million units, and top thee vendors in China accounted for 47% of total shipments.

Who are at the top three? Is it Ericsson? Nokia? Or Apple? No, none of them are at the top three. The biggest names are Chineese brands like Huawei, OPPO and Vivo. Its a surprice to see that Apple are fifth in this important market. Its a bigger surpise to see Samsung below top five.

Its a big market, but its also a very important market, and Its also a big surprise to see the low cost company Xiaomi has dropped down about 40%. Its obviously tough for them to grow in the market with so many aggressive competitors.

OPPO is one of the greatest. Up over +124%. The company is founded in 2004 and the brand is a Chinese electronics manufacturer based in Dongguan, Guangdong.

OPPO Digital is based in Mountain View, California, Unitted States. It is known for its universal upconverting DVD and Blu-ray Disc players. Its first product was the OPPO OPDV981H Up-Converting Universal DVD Player.

OPPO entered the mobile market in 2008.

Last year, OPPO signed an agreement with FC Barcelona to become an official partner of the Spanish football club. OPPO has become a stiff competitor in the Chinese market, which is growing faster than any other mobile company.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Wal-Mart spend a lot of money on e-commerce

More retailers are on the way with their Q2 reports, and this time I will take a closer look at Wal-Mart Stores Inc. The stock peaked at an all-time high early last year, but slid. Now, the stock is on the way up again. To the top.

Wal-Mart Stores are changing and that`s fast. They are on the way to change to an e-commerce business from the traditional retail business. The firm has invested a lot of money in improving back and front-ends of the e-commerce business.

 

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A couple of weeks ago, Wal-Mart acquired online retailer jet.com, for $3 billion. The company can feel the pressure from its biggest competitor Amazon, and their acquisition of jet.com will strengthen their e-commerce business.

Wal-Mart also sold its Chinese e-commerce business, Yihaodian. Everything was sold to the Chinese online retailer JD.com. All this is done to stay more focused on the international e-commerce presence.

CEO Doug McMillon said: «E-commerce growth here is too slow. The U.S number is better than the global number, but neither is as high as wed like. We can see progress against several of the necessary capabilities we need to win in e-commerce, but were still working on a few others. We need them all to come together to see stronger growth.»

The company has increased its labor costs in addition to a stronger dollar, and that in turn has given them a negative YoY profit growth for the last 5 consecutive quarters. Stiff competition from Amazon has also turned Wal-Mart`s revenue negative in the last two quarters of fiscal 2016.

Store sales have come in positive for the last 7 quarters, despite the downturn on the top and bottom-line. The world`s largest retailer with its market cap of $225,42 billion, is guiding for US same store sales growth in the range of 1% – 3%, and Wal-Mart come out with a report on Thursday.

The Estimize consensus is looking for earnings per share of $1,04 on $120,39 billion in revenue. Compared to a year earlier this reflects a 4% decrease in earnings and flat sales.

Earnings estimates have increased 3% since the last quarterly report, with sales estimates unchanged.

Wal-Mart Stores Inc will report on 18th August, before the markets open.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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Home Depot and the broader recovery in the housing market

This is a week for retailers. I will take a closer look at Home Depot on Tuesday. Their business tells us a lot about the activity in the market. The fact is that Home Depot is at its highest level ever! The stock has gone straight up since the financial crisis.

The numbers from the retailers indicate that consumers are spending money some places and a more lackluster sluggish consumer spending other places, but one is for sure; Americans love to fix their own houses.

 

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Home Depot Inc is the largest home-improvement retailer in America, and the company is set to report earnings on Tuesday 16th, before the market opens for trading.

The broader recovery in the housing market since the financial crisis have helped Home Depot`s recent jump. So have the consumers improving experience. On top of that you can add an extremely low-interest rate.

Other things that have helped Home Depot is the unemployment rate which is down below 5%. It seems like the consumers are earning money and spend a lot of money on their own homes. They buy properties because the housing prices are high.

Sales growth last quarter topped 21% from online sales. That is helped from the company`s focus on innovation which include Milwaukee Pneumatic Framing Nailer, the 20-volt Max Brushless Finish Nailer, and the Pergo Outlast Plus Laminate Flooring.

Home Depot`s Gold Medal Employees is interesting. Since 1992, Home depot has employed 570 Olympic hopefuls in its Olympic Job Opportunity Program. The program provided athletes with benefits and flexibility for training and competition, and the program was discontinued in 2009.

The Estimize consensus is looking for earnings of $1,98 per share on $26,49 billion in revenue. Compared to a year earlier, earnings are expected to increase by 15% with revenue increasing 7%.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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LinkedIns report will be one of the last quarterly reports as a publically traded company

LinkedIn was a scary case earlier this year. In February, the stock plummeted more than 40% in just one single day! That made many investors a bit sceptical. Some investors had panic and sold with both hands. Some had a Hold strategy.

Those who was cold enough to hold saw the stock come back. Later on, the stock went up 46% in one single day. What happened? Investors jumped in on very good news. That day, Microsoft announced that it has agreed to acquire the professional networking platform in an all-cash deal worth $26,2 billion.

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Microsoft is paying $196 a share for LinkedIn, and LinkedIn`s official vote regarding the Microsoft acquisition will take place on August 19, 2016. Microsoft sold $20 billion in debt on Tuesday to fund the deal.

You cannot compare LinkedIn with Facebook but if you do, you will a different story with stagnant user growth. That being said, LinkedIn saw the largest growth in cumulative members since 2014 in the first quarter of 2016. It was up 19% to 433 million.

Talent Solutions and Marketing Solutions have remained LinkedIn`s strongest segments, which is growing 41% and 29% last quarter.

LinkedIns report on Thursday will be one of the last quarterly reports as a publically traded company after Microsofts bid last month.

Revenue is expected to come in at $902 million with an earnings per share of $0,81. This is an increase of 47% in earnings and 26% in sales compared to last year at the same time.

LinkedIn will report on August 4, after the market closes.

 

asphalt

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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