adobe
Adobe is a multinational software company best known for its creative and digital media products. Founded in 1982 by John Warnock and Charles Geschke, Adobe originally focused on desktop publishing and revolutionized the industry with its PostScript technology. Over time, it expanded into a broad suite of tools that support graphic design, video editing, photography, and web development. Flagship products like Photoshop, Illustrator, Premiere Pro, and Acrobat have become industry standards, widely used by professionals and hobbyists alike.
In recent years, Adobe has transitioned from a traditional software licensing model to a cloud-based subscription service known as Adobe Creative Cloud. This shift has allowed users to access software updates more frequently and collaborate more easily across devices. Beyond creative tools, Adobe has also built a strong presence in digital marketing and analytics through its Adobe Experience Cloud, offering businesses solutions for customer data management, advertising, and personalized content delivery.
Adobe continues to play a significant role in shaping the digital economy by enabling creativity, communication, and digital transformation. Its innovations in artificial intelligence, such as Adobe Sensei, enhance automation and streamline workflows across its platforms. As content creation and digital experiences become increasingly important across industries, Adobe remains a key player, continually adapting its technologies to meet evolving user needs.
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ADOBE SYSTEMS INC. $85 (Nasdaq symbol ADBE; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 498.3 million; Market cap: $42.4 billion; Price-to-sales ratio: 9.0; No dividends paid since June 2005; TSINetwork Rating: Average; www.adobe.com) makes software for publishing companies and website developers. Its main products include Adobe Acrobat, which lets users create and edit electronic documents in the widely used PDF format, and its Creative Suite package of photo editing and desktop publishing programs. In 2012, Adobe started selling its Creative Suite software as a cloud-based service called Creative Cloud. The company now gets 74% of its revenue from recurring sources....
Computer technology continues to change— and spread— rapidly. We feel the best way to profit from this growth is by investing in well-established companies that lead their markets, like the four we analyze below. All of them have strong earnings and balance sheets. That lets them spend heavily on product development and buy smaller firms with attractive technologies. We have a high opinion of all four, but we see only two as buys right now....
ADOBE SYSTEMS INC. $87.94 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.8 million; Market cap: $44.4 billion; No dividends paid) makes software that lets computer users create, edit and share documents in the popular PDF format. Graphic designers also use its programs to create print publications and web pages. In its fiscal 2015 fourth quarter, which ended November 27, 2015, Adobe earned $0.62 a share, up 59.0% from $0.39 a year earlier. Revenue jumped 21.7%, to a record $1.31 billion from $1.07 billion. In the latest quarter, the company added 833,000 Creative Cloud subscribers (net of cancellations). This service now has 6.2 million users, up 78.6% from a year ago. Adobe is also seeing strong demand for its newer cloud-based offerings, including Document Cloud, which lets users create, manage and sign online documents for a monthly fee....
ACI WORLDWIDE $18.83 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-390-7600; www.aciworldwide.com; Shares outstanding: 118.3 million; Market cap: $2.2 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. Its products also help cut fraud. In the three months ended September 30, 2015, ACI’s revenue fell 4.3% to $238.7 million from $249.6 million a year earlier. Earnings declined 6.1%, to $14.8 million, or $0.13 a share, from $15.7 million, or $0.14. The higher U.S. dollar cut revenue and earnings at the company’s international operations. ACI is benefiting from the shift to chip-and-PIN debit and credit cards. That migration is the result of a liability shift for the EMV (EuroPay, MaterCard and VISA) payment networks, which came into effect in October 2015....
ADOBE SYSTEMS INC. $95.56 (Nasdaq symbol ADBE; TSINetwork Rating: Average) (408-536-6000; www.adobe.com; Shares outstanding: 498.8 million; Market cap: $46.9 billion; No dividends paid) reported that its revenue jumped 21.7% in the three months ended November 27, 2015, to a record $1.31 billion from $1.07 billion a year earlier. The company’s earnings per share rose 59.0%, to $0.62 from $0.39. The gains came from rising demand for its subscription services, particularly the Creative Cloud package of photo-editing and desktop-publishing programs. However, the stock has gained 32% in the past year and now trades at a high 34.0 times the $2.81 a share Adobe will likely earn in fiscal 2016. Moreover, the company gets 40% of its revenue from outside the U.S., so the rising U.S. dollar is a risk factor....
NEWELL RUBBERMAID INC., $45.28, New York symbol NWL, is reportedly negotiating a merger with Jarden Corp. (New York symbol JAH). Jarden makes consumer products, including Sunbeam kitchen appliances, Mr. Coffee coffee makers, Ball jars, Crock-Pot cookers and Rawlings baseball mitts. It would cost around $11.8 billion to buy Jarden, which is almost equal to Newell’s $12.7-billion market cap (the value of all outstanding shares). The combined firm would have $14 billion of annual sales....
REITMANS (CANADA) LTD., $4.02, symbol RET.A on Toronto, owns 775 women’s clothing stores across Canada. The chain consists of 332 Reitmans, 136 Penningtons, 107 Addition Elle, 83 RW & Co., 68 Thyme Maternity, 17 Hyda and 32 Smart Set outlets. It also has 21 Thyme Maternity boutiques in Canadian Babies “R” Us stores. In the three months ended October 31, 2015, Reitmans’ sales rose slightly, to $240.3 million from $238.3 million a year earlier. Same-store sales gained 7.6%, with brick-and-mortar stores increasing 4.8% and e-commerce jumping 72.2%....
ACI WORLDWIDE $22.54 (Nasdaq symbol ACIW; TSINetwork Rating: Speculative) (402-390-7600; www.tsainc.com; Shares outstanding: 117.8 million; Market cap: $2.7 billion; No dividends paid) makes software for processing transactions involving credit cards, debit cards, automated teller machines, point-of-sale terminals and interbank payments. The company’s products also help cut fraud. In the three months ended June 30, 2015, ACI’s revenue rose 4.3% to $265.8 million from $254.8 million a year earlier. Earnings jumped to $30.0 million, or $0.26 a share, from $14.0 million, or $0.12. Cost cuts were the main reason for the higher profits. ACI is benefiting from the introduction of technology for the shift to chip-and-PIN debit and credit cards, which sped up with the EMV (EuroPay, Master- Card and VISA) payment networks’ liability shift, which came into effect in the U.S. on October 1, 2015....
MITEL NETWORKS CORP., $10.56, symbol MNW on Toronto, jumped over 16% this week after activist investor Elliott Management Corp. released a letter yesterday disclosing stakes in Mitel and Polycom Inc. (symbol PLCM on Nasdaq). Elliott, founded by hedge-fund manager Paul Singer in 1977, is urging the two companies to merge to increase their combined profits in a very competitive market. Elliott now holds 6.6% of Polycom and 6.3% of Mitel. Mitel develops and markets products centred on business telephone systems, including technology that integrates land lines and mobile phones. The company also offers call centre and videoconferencing products....
YUM! BRANDS INC., $70.28, New York symbol YUM, fell 14% this week after reporting lower-than-expected quarterly results. The company also cut its full-year forecast due to slow sales in China following last year’s food-safety problems at its KFC outlets. In the three months ended September 5, 2015, Yum earned $421 million, up 4.2% from $404 million a year earlier. Per-share profits gained 6.7%, to $0.95 from $0.89, on fewer shares outstanding. Without unusual items, including a writedown of its Mexican real estate holdings, Yum earned $1.00 a share in the latest quarter, missing the consensus estimate of $1.07....