Visa Inc.
AMERICAN EXPRESS CO. $86 (New York symbol AXP, Conservative Growth Portfolio, Finance sector; Shares outstanding: 1.1 billion; Market cap: $94.6 billion; Price-to-sales ratio: 2.8; Dividend yield: 1.1%; TSINetwork Rating: Average; www. americanexpress.com) gets most of its revenue from the fees it charges merchants who accept its charge cards (which have no pre-set spending limit and must be paid in full each month) and credit cards (which can carry a balance).
Unlike other credit card companies, such as Visa and MasterCard, Amex is also a lender. That lets it collect interest payments on its cardholders’outstanding balances.
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Unlike other credit card companies, such as Visa and MasterCard, Amex is also a lender. That lets it collect interest payments on its cardholders’outstanding balances.
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APPLE INC., $560.02, Nasdaq symbol AAPL, moved up this week in response to media reports that the company has signed a deal to supply iPhones to China Mobile, that country’s largest wireless carrier, with over 740 million subscribers. The Chinese government recently authorized China Mobile to offer 4G wireless service. That should spur demand for smartphones that can take advantage of the faster speeds that 4G offers, including the new iPhone 5S and 5C models. Apple already sells iPhones to smaller Chinese carriers, but they use an older technology. Adding China Mobile could boost iPhone sales in China by around 17% in the company’s current fiscal year, which ends September 30, 2014....
Exchange traded funds (ETFs) are set up to mirror the performance of a stock-market index or subindex. They hold a more or less fixed selection of securities that represent the holdings that go into the calculation of the index or sub-index.
ETFs trade on stock exchanges, just like stocks....
ETFs trade on stock exchanges, just like stocks....
AIMIA INC. (Toronto symbol AIM; www.aimia.com) owns and operates Aeroplan, Canada’s largest loyalty program. It also owns Nectar, the U.K.’s biggest loyalty program. In addition, Aimia has interests in Air Miles Middle East and Nectar Italia, as well as Club Premier, the leading loyalty program in Mexico....
MCKESSON CORP., $154.99, New York symbol MCK, rose 10% this week to a new all-time high after it agreed to buy Celesio AG, a Germany-based firm that distributes prescription drugs in Europe and Brazil. The company will pay $8.3 billion for Celesio, which includes its debt. This is a big purchase for McKesson, which has a market cap of $35.4 billion. The deal should close sometime in 2014. The combined company will have annual revenue of $150 billion, and will serve over 120,000 hospitals and pharmacies in more than 20 countries. That will cut McKesson’s reliance on the U.S., which currently accounts for 90% of its revenue. The company’s bigger size will also help it negotiate lower prices from pharmaceutical makers....
Effective September 23, 2013, the Dow Jones Industrial Average, which consists of 30 companies, removed Alcoa (symbol AA on New York), Hewlett-Packard (symbol HPQ on New York) and Bank of America (symbol BAC on New York) and replaced them with Nike (symbol NKE on New York), Visa (symbol V on New York) and Goldman Sachs (symbol GS on New York). The reasons for Alcoa’s removal centred around its low stock price and its declining role in a U.S. economy that is less oriented toward heavy manufacturing. The Dow Jones Industrial Average was created in 1896 by Charles H. Dow, one of the founders of The Wall Street Journal. The original index had 12 companies, but it gradually increased to 30 by 1928....
BLACKBERRY LTD., $8.28, Toronto symbol BB, has accepted a $9.00 U.S.-a-share takeover offer from a consortium led by Fairfax Financial Holdings (Toronto symbol FFH). Fairfax is the smartphone maker’s largest investor, with roughly 10% of its outstanding shares. This tentative agreement gives BlackBerry until November 4, 2013, to secure a better deal. It will also give Fairfax and its potential partners time to examine BlackBerry’s financial condition. If BlackBerry accepts a rival offer, it will have to pay a $157.2-million U.S. break fee to Fairfax. That fee would rise to around $262 million U.S. if the company signs a binding deal with Fairfax and does not go through with it. However, Fairfax would not have to pay a fee if it cancels the deal....
BLACKBERRY LTD., $9.08, Toronto symbol BB, fell 16% on Friday after the company announced that it will cut 40% of its workforce due to slow demand for its new BlackBerry 10 smartphones. In its fiscal 2014 second quarter, which ended August 31, 2013, BlackBerry sold 3.7 million phones. That’s down from 7.4 million phones a year earlier. BlackBerry will also write down the value of its unsold phones. As a result, it expects to report a loss of between $950 million, or $1.81 a share, and $995 million, or $1.90 a share, in the second quarter (all amounts except share price in U.S. dollars). If you exclude unusual items, it will still lose between $0.47 and $0.51 a share....
AIMIA INC., $15.77, symbol AIM on Toronto, has finalized its deal for TD Bank to become the primary credit card issuer for Aeroplan, Aimia’s main loyalty program. TD is a recommendation of The Successful Investor, our newsletter that focuses on conservative Canadian investing. Aeroplan is Canada’s largest loyalty program, with over 4.6 million members who collect Aeroplan miles from participating companies. Members can exchange their miles for flights, car rentals, hotel rooms and merchandise. Under this new 10-year deal, which would begin January 1, 2014, TD will launch new credit cards under the Aeroplan Visa banner, including cards for frequent flyers and small businesses....