sony
New York symbol SNE, is one of the world’s leading makers of consumer electronics. Products include TV sets, computers and its PlayStation video game console. It also owns Columbia Pictures.
Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Beware of companies that are more interested in boosting their stock than in building their business.” Penny stock promoters love to make deals with major, household-name companies. That’s because they think the public is far more likely to buy penny stocks that have agreements with Teck Resources, BHP Billiton or some other major mining company to finance exploration of their mining claims. Or if Sony, Apple or some other household-name multinational has agreed to evaluate their computer program or electronic gadget. The link with a major gives them instant credibility, especially with investors who buy penny stocks....
Cisco Systems Inc., $23.14, symbol CSCO on Nasdaq (Shares outstanding: 5.7 billion; Market cap: $131.9 billion), is a leading maker of hardware and software that links and manages computer networks. The company’s hardware includes routers, local-area network (LAN) and asynchronous transfer mode (ATM) switches, and dial-up access servers. (Servers are computers that manage shared files or programs on a network.) Cisco’s Internet Operating System (IOS) software ties these products together, delivers network services (which interconnect and move information between networks) and lets programs run on networks. Cisco gets about 46% of its revenue from overseas customers. The company’s revenues fell from $39.5 billion in fiscal 2008 (years end July 31) to $36.1 billion in fiscal 2009. However, now that the economy has begun to revive, many businesses have begun updating their networking equipment. As a result, Cisco’s revenue jumped 27.0% in its third quarter, which ended May 1, 2010, to $10.4 billion from $8.2 billion a year earlier. Excluding one-time items, its earnings rose 41.2%, to $2.5 billion, or $0.42 a share, from $1.8 billion, or $0.30 a share. The company bought back 87 million shares during the quarter, at a cost of $2.25 billion....
SONY CORP. ADRs $30 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $30.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 0.9%; WSSF Rating: Average) has teamed up with INTEL CORP. $21 (Nasdaq symbol INTC; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.6 billion; Market cap: $117.6 billion; Price-to-sales ratio: 3.1; Dividend yield: 3.0%; WSSF Rating: Above Average) and Internet search-engine provider Google Inc. (Nasdaq symbol GOOG). Under this new alliance, Sony will build television sets that use Intel’s chips and Google’s search and software expertise. The new sets will let viewers search and download videos from the Internet without an external computer. Sony will start selling the new sets in time for the 2010 Christmas shopping season. This alliance should give Sony a competitive advantage over other television makers. Sony is a buy....
MOSAID TECHNOLOGIES INC. $22.18 (Toronto symbol MSD; SI Rating: Extra Risk) (613- 599-9539; www.mosaid.com; Shares outstanding: 11.8 million; Market cap: $260.9 million; Dividend yield: 4.5%) mainly licenses patented semiconductor (computer chip) and telecommunications technology, including patents for technology used in smartphones and laptops. The company complements this business by developing its own memory and other technologies. In total, Mosaid holds about 1,900 patents and applications. The company licenses patents based on its own innovations. It also buys patents, and has secured sublicensing rights to others.
Selling to world leaders
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Exchange-traded funds (ETFs) have gained popularity in recent years, mainly because many ETFs offer very low management fees. In addition to low fees, the best ETFs offer well-diversified, highly tax-efficient portfolios. However, quality varies. The investment industry has created all sorts of ETFs. All too many exist to tap into popular, but risky, themes and fads, so you need to be highly selective with your ETF holdings. Here are five foreign ETFs we like:...
THE BOEING CO. $72 (New York symbol BA; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 757.0 million; Market cap: $54.5 billion; Price-to-sales ratio: 0.8; Dividend yield: 2.3%; WSSF Rating: Above Average) will increase production of its 777 passenger jet to seven planes a month from five in mid-2011. In mid-2012, it will boost production of its 747 airliner to two planes a month from 1.5. The increases should let Boeing meet rising demand as the improving economy spurs airlines to replace aging planes. The company is also continuing to test its new 787 Dreamliner. Boeing is still on schedule to start delivering the new plane by the end of 2010. By 2013, it hopes to produce 10 Dreamliners a month, up from two a month now....
Mosaid Technologies Inc., $24.12, symbol MSD on Toronto (Shares outstanding: 11.8 million; Market cap: $284.6 million), mainly licenses patented semiconductor (computer chip) and telecommunications technology, including patents for technology used in smartphones and laptops. The company complements this business by developing its own memory and other technologies. In total, Mosaid holds about 1,900 patents and applications. The company licenses patents based on its own innovations. It also buys patents, and has secured sub-licensing rights to others. Thanks to Mosaid’s long history of designing computer chips, the company has a wide range of techniques and technology patents to license. Its customers include Nokia, Buffalo Inc., Oki Semiconductor and Samsung Electronics. Mosaid’s licenses require each licensee to pay an agreed amount over a fixed period of at least one year....
QUAKER CHEMICAL CORP., $25.19, New York symbol KWR, makes lubricants and specialty chemicals that protect machinery from corrosion. The stock rose 26% this week after the company reported 2009 earnings that were much higher than expected. Quaker earned $16.2 million in 2009. That’s up 45.7% from $11.1 million the previous year. Earnings per share rose 40.0%, to $1.47 from $1.05, on more shares outstanding. Both years included costs related to Quaker’s restructuring plan, which included a 10% cut to the company’s workforce. As well, Quaker’s former chief executive officer retired in October 2008 and entered into a three-year consulting contract with the company. That cost Quaker $3.5 million in 2008 and $2.4 million in 2009. It will pay a further $1.3 million this year....
SONY CORP. ADRs $33 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.0 billion; Market cap: $33.0 billion; Price-to-sales ratio: 0.4; Dividend yield: 1.4%; WSSF Rating: Average) plans to start selling TV sets than can project three-dimensional (3D) images. Demand for these sets will probably be small, at least at first. But Sony has a long history of successfully introducing new technologies, so these sets could become as popular as today’s high-definition models. The company will also use its 3D technology in its TV shows, movies and video games. That should showcase the benefits of its new TV sets when they go on sale later this year. Sony is a buy.
Technology has made extraordinary advances in the past decade, yet lots of investors lost money when they invested in it. Often, that was because they invested too early. In their eagerness to get in on the “ground floor,” they bought tech stocks based mainly on potential improvements in the technology. But they failed to consider the political, financial and practical obstacles that new technology always faces.