wall street
DOREL INDUSTRIES, $35.45, symbol DII.B on Toronto, has agreed to buy 70% of Caloi, Brazil’s largest bicycle company, for an undisclosed sum. Established in 1898, Caloi is one of the world’s oldest bicycle makers. It is also Latin America’s top-selling bicycle brand and the leader in the Brazilian market. Caloi has a plant in Brazilian city of Manaus that is the largest bicycle manufacturing facility outside Southeast Asia, producing more than 700,000 units a year....
APPLE INC., $502.33, Nasdaq symbol AAPL, rose 9% this week after activist investor Carl Icahn announced that he had purchased an undisclosed stake in the company. Icahn, who has a long history of pushing companies to make changes that increase shareholder value, wants Apple to buy back more of its shares. Under its current plan, the company expects to spend $60 billion on share repurchases by the end of 2015. That’s equal to 13% of its $456.3-billion market cap. If Apple agrees to buy back more shares, it will probably borrow the cash it needs to do so. That’s because it holds most of its cash and investments of $146.6 billion, or $161.40 a share, in offshore accounts, and bringing them back to the U.S. would trigger a large tax bill. Apple’s long-term debt is just $17.0 billion, so it has plenty of room to borrow more funds....
TELUS CORP., $31.97, Toronto symbol T, gained 3% this week in response to media reports that U.S.-based Verizon Communications (New York symbol VZ) may postpone its plan to enter Canada’s wireless market. Verizon is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks. Verizon is reportedly interested in buying two smaller Canadian wireless carriers, Mobilicity and Wind Mobile, and bidding on new wireless frequencies, or spectrum. For technical reasons, Verizon may prefer to buy the new spectrum at an auction to be held in January 2014 before acquiring the two companies. Telus gets 53% of its revenue and 67% of its earnings from wireless services. That makes it particularly vulnerable to new competition from Verizon. Telus’s stock will likely remain volatile until Verizon’s intentions become clearer....
The possibility of U.S.-based Verizon Communications entering the Canadian wireless market has hurt BCE’s shares. (Verizon is a recommendation of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.) However, BCE’s strategy of selling bundles of services—wireless, regular phone, Internet and TV—under long-term contracts should help it hang on to its customers.
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THE BOEING CO. (New York symbol BA; www.boeing.com) is a leading maker of passenger jets....
SONY CORP. ADRs, $20.15, New York symbol SNE, fell 7% this week after the company rejected a plan from Dan Loeb, an activist investor who owns about 7% of Sony’s shares. Loeb wants Sony to sell 15% to 20% of its entertainment division through an initial public offering. This business, which makes movies, television programs and music recordings, accounts for about 16% of Sony’s revenue. However, the company feels that owning entertainment content gives it an edge over other electronics makers. Moreover, Sony is making more movies and TV shows in partnership with other studios, which should cut the entertainment business’s costs and improve its profits....
GOOGLE INC. (Nasdaq symbol GOOG; www.google.com) is the world’s top Internet search engine, with about two-thirds of this market. It makes money by selling advertising on its websites. Google charges advertisers every time a user clicks on one of their ads. The company gets 93% of its revenue from advertising....
SYMANTEC CORP., $26.52, Nasdaq symbol SYMC, sells computer-security technology, including anti-virus and email-filtering software, to businesses and consumers. The stock jumped 8% this week after the company reported record quarterly revenue and earnings. In its fiscal 2014 first quarter, which ended June 28, 2013, Symantec’s revenue rose 2.5%, to $1.71 billion from $1.67 billion a year earlier. That beat the consensus estimate of $1.64 billion. The company is doing a good job of selling its products as ongoing subscriptions instead of one-time purchases. Subscriptions now account for 45% of Symantec’s revenue, up from 44% a year ago....
POTASH CORP. OF SASKATCHEWAN, $30.04, Toronto symbol POT, fell 21% this week following news that Russian potash producer OAO Uralkali will exit its marketing joint venture with Belarusian potash producer Belaruskali. That’s because Belaruskali continues to sell some of its potash outside this partnership, which accounts for about 42% of global potash sales. Uralkali now plans to increase production and sell its potash directly to customers in China. That could put more pressure on potash prices, which have suffered in the past year due to rising supplies. In the second quarter of 2013, Potash Corp. sold its potash for an average of $356 U.S. a tonne, down 17.8% from $433 a year earlier. Potash Corp. owns a third of Canpotex, a marketing joint venture that sells potash to customers outside Canada and the U.S. Canpotex accounts for 25% of global potash sales. Agrium (see below) and Mosaic Co. (New York symbol MOS) each own a third of Canpotex....