sony

The low Japanese yen makes products from Canon and Sony cheaper outside of Japan. But their sales and earnings will remain under pressure as they adjust to changing consumer tastes. CANON INC. ADRs $30 (New York symbol CAJ; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.1 billion; Market cap: $33.0 billion; Price-to-sales ratio: 1.1; Dividend yield: 4.2%; TSINetwork Rating: Above Average; www.canon.com) gets over half of its revenue by making office equipment, mainly printers and copiers. Other products include digital cameras and parts for TVs and medical gear. Businesses continue to buy more of Canon’s copiers and laser printers, but consumers are taking more pictures with smartphones. That’s hurting the company’s camera sales....

SONY CORP. ADRs $25 (New York symbol SNE; Conservative Growth Portfolio, Manufacturing & Industry sector; ADRs outstanding: 1.3 billion; Market cap: $32.5 billion; Price-to-sales ratio: 0.4; Dividend suspended in September 2014; TSINetwork Rating: Average; www.sony.com) recently announced plans to sell $2.6 billion worth of new common shares, as well as $1.0 billion of convertible bonds. It will use the proceeds to make more of its industry-leading image sensors for digital cameras, smartphones and tablets.

The company has had trouble selling its own smartphones and other devices, so it makes sense to focus on electronic components. As part of a recent restructuring, Sony quit making cheaper mobile phones for emerging markets, though it still makes higher-priced models for developed nations.

Meanwhile, in its fiscal 2016 first quarter, which ended June 30, 2015, Sony’s revenue fell 17.3%, to $14.8 billion from $17.9 billion a year earlier. In Japanese yen, revenue fell just 0.1%.

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Profits have soared for Electronic Arts, but the need to keep turning out successful video games makes it a high risk stock in our view.

Electronic Arts Inc., $73.54, symbol EA on Nasdaq (Shares outstanding: 312.1 million; Market cap: $22.5 billion; www.ea.com), makes video games for a variety of devices, including computers, consoles (such as the Sony PlayStation, Microsoft Xbox and Nintendo Wii) and mobile devices (including the iPhone and iPad). The company sells a number of sports-based titles it reissues annually. It has licensing deals with most major professional sports organizations, including the National Football League, National Basketball Association, National Hockey League, FIFA (soccer) and PGA Tour golf. Electronic Arts also develops its own game franchises and constantly releases sequels and new versions that give it ongoing revenue. Top-selling examples include The Sims (a life-simulation game), Need for Speed (car racing), Battlefield (war), Plants vs. Zombies (strategy) and Dragon Age (a fantasy role-playing game). In addition, Electronic Arts makes games based on popular movies, such as Star Wars....

CONAGRA FOODS INC., $44.56, New York symbol CAG, plans to sell its private-label food business, which makes packaged foods for grocery, warehouse club and drug stores. The company entered this business in January 2013 when it paid $4.75 billion for Ralcorp Holdings, the largest private-label food maker in the U.S. However, the purchase hasn’t worked out as well as ConAgra hoped, as strong competition and higher ingredient costs hurt Ralcorp’s sales and earnings. As a result, ConAgra has had to write down this investment by $2.1 billion. In its fiscal 2015 fourth quarter, which ended May 31, 2015, ConAgra’s overall sales rose 3.7%, to $4.10 billion from $3.96 billion a year earlier. That missed the consensus forecast of $4.14 billion....

SYMANTEC CORP. $24.10 (Nasdaq symbol SYMC; TSINetwork Rating: Average) (650-527-8000; www.symantec.com; Shares outstanding: 680.7 million; Market cap: $16.1 billion; Dividend yield: 2.5%) continues to strengthen its fast-growing cybersecurity business while getting set to split off its Veritas Technologies division. Corporations are spending more on cybersecurity following highprofile attacks on Sony, Home Depot and Target. Symantec is taking advantage of this trend by hiring more programmers. It has also cancelled unprofitable contracts and simplified its product lines. These moves cut the company’s profits by 10.2% in its fiscal 2015 fourth quarter, which ended April 3, 2015, to $299 million, or $0.43 a share, from $333 million, or $0.48. Sales fell 6.2%, to $1.55 billion from $1.65 billion—though if you disregard the U.S. dollar’s negative impact on Symantec’s overseas sales, its revenue rose 1%....

SYMANTEC CORP. $24.10 (Nasdaq symbol SYMC; TSINetwork Rating: Average)(650-527-8000; www.symantec.com; Shares outstanding: 680.7 million; Market cap: $16.1 billion; Dividend yield: 2.5%) continues to strengthen its fast-growing cybersecurity business while getting set to split off its Veritas Technologies division.

Corporations are spending more on cybersecurity following highprofile attacks on Sony, Home Depot and Target. Symantec is taking advantage of this trend by hiring more programmers. It has also cancelled unprofitable contracts and simplified its product lines.

These moves cut the company’s profits by 10.2% in its fiscal 2015 fourth quarter, which ended April 3, 2015, to $299 million, or $0.43 a share, from $333 million, or $0.48. Sales fell 6.2%, to $1.55 billion from $1.65 billion—though if you disregard the U.S. dollar’s negative impact on Symantec’s overseas sales, its revenue rose 1%.

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These three companies have a long history of developing cutting-edge products. That’s partly why they’re hitting new multi-year highs. However, disruptive new technologies could quickly overtake their latest offerings and slow their growth. APPLE INC. $129 (Nasdaq symbol AAPL; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 5.8 billion; Market cap: $748.2 billion; Price-to-sales ratio: 3.7; Dividend yield: 1.5%; TSINetwork Rating: Average; www.apple.com) aims to cut its reliance on the iPhone smartphone, which supplies nearly 70% of its revenue, with several new products....

NVIDIA CORP. $22 (Nasdaq symbol NVDA; Aggressive Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 549.8 million; Market cap: $12.1 billion; Price-to-sales ratio: 2.6; Dividend yield: 1.5%; TSINetwork Rating: Average; www.nvidia.com) is a leading designer of 3D-capable video chips, which make video games run more smoothly and appear more lifelike. The company outsources most of its production to Asian chipmakers.

In its 2015 fiscal year, which ended January 25, 2015, Nvidia’s revenue rose 13.3%, to a record $4.7 billion from $4.1 billion in 2014.

Earnings jumped 36.1%, to $801.0 million from $588.4 million. The company spent $813.6 million on share buybacks in the past year. As a result, its earnings per share rose 43.4%, to $1.42 from $0.99.

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SHERWIN-WILLIAMS CO. $281 (www.sherwin-williams.com) earned $9.31 a share in 2014, up 24.6% from $7.47 in 2013. Sales rose 9.3%, to $11.1 billion from $10.2 billion. These gains are partly due to Mexican paint maker Comex’s U.S. and Canadian operations (including 314 stores), which Sherwin bought for $165 million in September 2013. Higher home construction also spurred paint sales. In addition, Sherwin raised its dividend by 21.8%. The new annual rate of $2.68 yields 1.0%. However, the stock is expensive at 25.1 times its likely 2015 earnings of $11.18 a share. Hold. SONY CORP. ADRs $27 (www.sony.com) has started selling its new PlayStation 4 video-game console in China. The company has sold 20.2 million units since it launched the new version in November 2013. However, Chinese gamers tend to prefer playing on personal computers or mobile devices, so it is unclear if they will buy the PlayStation. Moreover, government controls on content limit the number of games people can play online. Hold.