Archive for the ‘Internet Stocks’ Category

Paid Subscribers Are Lifting These Stocks

Why pay for something when you can get it for free? Since the dawn of the Internet, there has been so much free information available online that many consumers have come to expect it, much to the chagrin of newspapers and magazines.

Recently, though, there has been movement toward paid subscribership to these online entities. And after some initial resistance, the model seems to be paying off.

Newspapers are especially vulnerableThe onslaught of free news and information online has hit newspapers particularly hard. In an effort to stay prominent, many have posted articles on the Internet for free, which has hurt their print products. Some, however, like The New York Times (NYSE: NYT) , have begun installing paywalls in an effort to recoup some of the revenue lost from the decline of paid paper subscriptions.

According to figures from the Audit Bureau of Circulations, News Corp.'s (Nasdaq: NWSA) Wall Street Journal has stayed in the top position in the industry with the greatest circulation, while The New York Times kept its spot at No. 3. One factor that has helped these papers' staying power is their efforts at bolstering their paid digital subscribership, which is included in circulation numbers.

The Journal has had a content paywall in place for several years, which probably has helped the paper maintain its top spot. The Times instituted the model only last year, but has so far had excellent results, with a 73% rise in weekday readership from a year prior. Interestingly, the increase was directly attributable to paid online subscriptions acquired after the paywall was put up.

Gannett's (NYSE: GCI) flagship paper, USA Today, stayed at No. 2, and Gannett has put paywalls on some but not all of its other papers since the beginning of the year. USA Today, however, remains free online. Its dead-tree version has suffered from reduced sales to hotels, but it is too soon to tell if revenue from paywalls on other publications will make up the difference.

Getting what you pay forThe evidence shows that selling subscriptions, once unheard of with digital formats, can prop up companies that have lost ground due to the plethora of free digital content. I believe that it's only a matter of time until other companies follow suit. Most notably, the Washington Post (NYSE: WPO) has remained stalwart in its refusal to put up paywalls on its online content. Perhaps the addition of Digg's former tech team will help convince the Post that when it comes to making money, times have changed -- and, to survive, companies need to change, too.

Bottom line: Disruptive technologies like the Internet have driven enormous changes in consumer behavior -- and many old media companies have fallen by the wayside as a result. Getting in on the ground floor of a revolutionary disruptive technology doesn't come often for investors, but luckily our analysts at the Fool have discovered an emerging technology that is poised to disrupt in much the same way as the Internet. Our free video report will outline this new technology, one that could very well end the "Made in China" era as we know it.

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Paid Subscribers Are Lifting These Stocks

Money Power: Savings ideas for scared, young investors

A case of the stock market willies may be especially harmful to novice investors. After all, the classic thinking is that younger people should have riskier portfolios stuffed with stocks because they have so many years to ride out the ups and downs of market cycles. Across the pond, the Brits have come up with an interesting solution to this problem through a major overhaul of the retirement savings system, the National Employment Savings Trust.

Mark Fawcett, NEST's chief investment officer, explains that during the credit crisis of 2008, many young retirement savers stopped making contributions or moved their nest eggs to cash. That meant they locked in their losses and missed the stock market rebound that has taken place in the U.K., just as it has in the U.S.

So, Fawcett says, NEST has re-engineered some investments, keeping in mind the fearfulness of young investors. Instead of offering target-date funds that start out heavy on stocks and gradually grow more conservative as the years pass, the plan puts newbie investors into conservative funds that become aggressive as investors mature.

Here's how it works. A 22-year-old retirement saver may start with contributions to a target-date-type fund with a small percentage of stocks and, therefore, low risk. By the time the saver turns 27, the portfolio has a moderate allocation to stocks and increased but moderate risk. And by age 30, the saver is invested almost entirely in stocks.

But wait. Aren't investors missing out on big returns when they're young? "Maybe," says Fawcett, "but there's virtually no impact on the size of the final pot." That's because retirement savings balances are relatively small when investors are starting out.

John Ameriks, head of the investment counseling and research group at mutual fund giant Vanguard, says: "If you don't feel comfortable putting 90 percent in the market when you're young, put in 45 percent, (and) never let the risk involved in the stock market stop you from starting a savings program." Original Print Headline: Savings tips help scared investors

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Money Power: Savings ideas for scared, young investors

6 Small-Cap Stocks That Look Good Today

Consistently rising profits are a good omen for a small-cap company. While the word "profit" has many different implications, here we focus on diluted normalized earnings per share values that have increased over three consecutive years.

Normalized EPS is a company's earnings per share without accounting for one-time earnings and irregular expenses. Unlike regular EPS, diluted EPS takes into account convertible securities such as options, warrants, and convertible preferred shares that could be exercised and lower net income.

Therefore, diluted normalized EPS is typically lower (and more conservative) than regular EPS.

Price-to-sales ratio The price-to-sales ratio tells you how much a stock's current price is worth relative to revenue per sale. Be mindful that this ratio does not account for expenses or debt, and that there is normal variation between industries.

Here we screened for companies with a price-to-sales ratio of 1.5 or below. In other words, one dollar of share price is worth at most $1.50 in sales. We chose this limit after speaking with Neil Hennessy, portfolio manager and chief investment officer of Hennessy Mutual Funds, who said this is one of his favorite investing strategies.

Business section: Investing ideas We ran a screen based on the following criteria:

Below are the stocks our screen pulled up.

(Click here to access free, interactive tools to analyze these ideas.)

1. Andersons (Nasdaq: ANDE) : Engages in the agriculture and transportation businesses in the United States. The company has a market cap of $929.6 million, most recent closing price at $51.01. Diluted normalized EPS increased from $1.79 to $2.08 during the first time interval (12 months ending Dec. 31, 2009 vs. 12 months ending Dec. 31, 2008). For the second time interval, diluted normalized EPS increased from $2.08 to $3.48 (12 months ending Dec. 31, 2010 vs. 12 months ending Dec. 31, 2009). And for the last time interval, the EPS increased from $3.48 to $5.09 (12 months ending Dec. 31, 2011 vs. 12 months ending Dec. 31, 2010). Price/sales ratio of 0.21. Shares shorted have decreased from 1.28 million to 1.10 million over the last month, a decrease which represents about 1.04% of the company's float of 17.25 million shares. Days-to-cover ratio stands at 6.5 days.

2. AmeriGas Partners (NYSE: APU) : Operates as a retail and wholesale distributor of propane gas in the United States. The company has a market cap of $3.73 billion, most recent closing price at $40.20. Diluted normalized EPS increased from $2.70 to $2.85 during the first time interval (12 months ending Sept. 30, 2009 vs. 12 months ending Sept. 30, 2008). For the second time interval, diluted normalized EPS increased from $2.85 to $2.90 (12 months ending Sept. 30, 2010 vs. 12 months ending Sept. 30, 2009). And for the last time interval, the EPS increased from $2.90 to $2.93 (12 months ending Sept. 30, 2011 vs. 12 months ending Sept. 30, 2010). Price/sales ratio of 1.48. Shares shorted have decreased from 913,420 to 256,860 over the last month, a decrease which represents about 1.81% of the company's float of 36.28 million shares. Days-to-cover ratio stands at 0.8 days.

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6 Small-Cap Stocks That Look Good Today

Do Happier Employees Yield Healthier Stocks?

Studies show that great workplaces enjoy lower turnover and better financial performance than industry peers. But do these companies really achieve greater financial success over the long haul? Here I'll examine whether companies praised by their employees also receive applause from shareholders.

The listFortune magazine publishes a list of the "100 Best Companies to Work For" every year. In order to make the list, the companies are evaluated using a model developed by the Great Place to Work Institute. The model claims that employees value six attributes: trust, credibility, fairness, pride, respect, and camaraderie. The companies are rated based on what actions they take to foster these attributes in their work environments.

Just less than half of the companies on the list operate as either private businesses or non-profit entities. Some private businesses, such as Wegmans Food Markets, Container Store, and Edward Jones, have materialized near the top of the list for more than a decade. For my cursory analysis, I concentrated on the publically traded companies.

Crunching the numbersFor the 51 publically traded companies on the list, I homed in on the ones that consistently secured spots on the Fortune list over the past decade. That left me with a tidy group of 13 companies: five tech companies, four consumer goods producers, two financial-services providers, one retailer, and one telecom. I compared the performance of the five tech stocks to PowerShares QQQ, a surrogate for the NASDAQ 100 that takes dividend reinvestment into account, over the one-year, three-year, five-year, and 10-year periods. I compared the remaining eight non-tech stocks to the SPDR S&P 500 (NYSE: SPY) , which I used as a proxy for the S&P 500.

The tech stocks outperformed the PowerShares ETF in the one-year and 10-year periods. Over the 10-year period, the basket of tech stocks outperformed the PowerShares ETF by nearly 60 percentage points -- 183% total return, versus 125%.

For the non-tech stocks, the SPDR ETF actually outperformed in each period except the 10-year period, when the basket returned 107% total return, versus 58% for the SPDR ETF.

Blue ribbons Google (Nasdaq: GOOG) -- so prevalent it's a verb -- secured the coveted No. 1 spot on Fortune's list. Applauded by employees for its nap rooms and onsite haircuts, the leading Internet search provider grew its workforce by 33% last year. And its stock performance has been nothing shy of amazing: It has quadrupled the performance of the PowerShares ETF since Google went public in 2004. The advent of Google Drive, the company's foray into cloud computing, positions the company well for the future.

Feel-good food retailer Whole Foods Market (Nasdaq: WFM) also displayed impressive growth. Amazingly, Whole Foods pays 100% of its employees' health care premiums. The company posted performance five times better than the SPDR ETF during the one-year, three-year, and 10-year periods -- and an incredible 20 times better than the SPDR ETF during the five-year period. This grocer, known for good deeds among its employees and customers, continues to post impressive same-stores sales numbers and is positioned well for further growth.

Not too shabbyToymaker Mattel's (Nasdaq: MAT) stock appreciated significantly over the past decade with a 119% total return, pummeling the SPDR ETF's 58% total return. Mattel employees benefit from a compressed workweek schedule and on-site child care. Mattel continues to focus diligently on its international expansion and has been rewarded success, as overseas sales grew nearly 12% in 2011. And since the stock price recently pulled back, consider adding shares while the stock's on sale.

You gotta be kidding meDespite its recent floggings in the press, I was shocked to find Goldman Sachs (NYSE: GS) not only resting comfortably in the No. 33 spot for this year, but consistently appearing on the Fortune list. Not surprisingly, the biggest benefit cited was the pay; the average annual salary for a non-exempt professional employee is $139,200. The company lost a lot of ground in the one-year, three-year, and five-year periods, when its stock price dropped precipitously due to poor business decisions and a grave macroeconomic environment. Over the 10-year period, the financial-services company saw a total return of 60%, which only slightly edged out the SPDR ETF's 58% return during the same time period.

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Do Happier Employees Yield Healthier Stocks?

Gaming Stocks Gain For Fourth Straight Month

Posted: Apr. 30, 2012 | 3:47 p.m. Updated: May 1, 2012 | 9:18 a.m.

It's early in the quarterly earnings season, but initial reports have given a boost to the gaming sector.

For the fourth consecutive month, gaming stocks - on a whole - gained in value, according to Las Vegas-based financial consultant Applied Analysis, which charts the average daily stock prices for eight casino operators and four gaming equipment providers for its monthly Gaming Index.

Gaming operators posted mixed results; shares of Caesars Entertainment Corp. traded up more than 15 percent on an average daily basis during the month while shares of Ameristar Casinos took the largest tumble, off 7 percent in April.

All four gaming equipment makers had increased stock value in April, led by WMS Industries, which saw its average daily share price climb almost 7 percent.

Applied Analysis principal Brian Gordon said in a report to the firm's clients that positive first-quarter earnings reports suggest that market fundamentals are improving and investor expectations are on an upswing.

Last week, Las Vegas Sands Corp. told investors the company had net revenues of $2.76 billion and cash flow of more than $1 billion in the first quarter. Roughly 83 percent of the company's revenues came from its holdings in Macau and Singapore.

Meanwhile, Boyd Gaming Corp. and International Game Technology also released positive quarterly earnings.

"Strong growth in relatively new markets proved positive for the industry while demand for slot machines appears to be resuming," Gordon said.

The index, which is based on some 300 different market variables including average daily stock price, gained 8.24 points to reach 497.24.

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Gaming Stocks Gain For Fourth Straight Month