Investopedia: NCR An Interesting Mix Of Growth And Stability

Increasing automation is a fact of life, and NCR (NYSE:NCR) has a central role in making that happen. Dealing with ATMs instead of tellers is a long since accepted practice, and customers have either chosen or been forced to accept automated kiosks in lieu of working with human workers in a variety of other industries. Although NCR isn't likely to post torrid growth, the overall growth and value balance looks interesting.


ATMs a Solid Base
To a large extent, the North American ATM market is a replacement market where Diebold (NYSE:DBD) and Wincor Nixdorf have built a fairly lucrative industry with huge barriers to new entrants. For related reading, see The Ins And Outs Of Bank Fees.


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Invesotpedia: Apple May Yet Be Unreasonably Cheap

Everybody knows the Apple (Nasdaq:AAPL) story. The iPhone is everywhere and Apple seems to be one of the only companies to make money in tablets, notebooks and consumer electronics retailing. With upwards of 50 sell-side analysts covering Apple and institutions holding 71% of the shares, and online financial commentators going to the Apple well time after time for click-throughs, it would seem startling if there was anything unexpected to the Apple story. Yet, despite all of this, Apple shares actually look undervalued on even rather conservative expectations.

Plenty of Growth Drivers  
Even with the iPhone already being the share leader in smartphones, Apple can reasonably expect even more growth here for many years. Smartphones are still not the dominant cell phone type in North America, let alone the rest of the world. While Samsung, Google (Nasdaq:GOOG) and a revived Nokia (NYSE:NOK) will try to chip away at Apple's business, underlying market growth should keep the phone business moving forward for many additional years.

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Investopedia: Netflix Beats A Hasty Retreat

Even though one of the best lessons from Southwest Airlines (NYSE:LUV) founder Herb Kelleher is that the customer is not always right, the reality is that sometimes you still have to give them what they want. Stubbornly sticking with New Coke would have eventually done major harm to Coca-Cola (NYSE:KO), and Netflix (Nasdaq:NFLX) management seems anxious to ensure that Qwikster doesn't become their New Coke or their Waterloo.


So, for now at least, forget all about "creative destruction." Qwikster is dead. (For more see, Netflix And Creative Destruction.)

Turning the Ship
Netflix customers do not necessarily agree on much - there are huge differences in usage patterns, interesting trends in viewing preferences, and all manner of price sensitivities. But on this occasion they seemed to come to a nearly-universal conclusion - they didn't like Qwikster and they had no particular interest in having to navigate two different websites to continue using what had been a simple and seamless product.


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Investopedia: Netflix And Creative Destruction

Few things are easier in business than sticking with what has always worked before. Unfortunately, that is often an open invitation to hungry new competitors to come in, eat your lunch, take your customers and leave you with the bill. To that end, while investors (not to mention customers) may be confused, frustrated or angry with Netflix's (Nasdaq:NFLX) latest moves, they may be exactly what the company has to do to remain a leader in the fast-developing media content business.


Old Wine in New Bottles
Netflix's latest move is to separate its traditional DVD-by-mail business from its newer streaming media business. Management is renaming the DVD business "Qwikster," adding video game rental to the service, and operating it as a wholly-owned subsidiary with its own management and customer service infrastructure.

The Netflix name will now be solely for the streaming business, and the two companies will run quite separately. There will be different websites and customers will see two charges on their credit card statement if they sign up for or keep both services.



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Investopedia: Digital May Not Solve GameStop's Biggest Problem

There is plenty of discussion these days about whether leading video game retailer GameStop (NYSE:GME) is doomed to follow a Blockbuster-like path to irrelevance and/or whether would-be rivals like Netflix (Nasdaq:NFLX) and Coinstar (Nasdaq:CSTR) can get into its kitchen. Unfortunately for GameStop bulls, there are some real reasons for concern. (For other companies that are threatened by strong competition and a changing market, check out Companies Playing Catch-Up With The Competition.)

Digital Isn't Everything   
A recent article on TheStreet.com tried to point toward growing digital sales as a sign that GameStop is adapting with the times and capable of staying competitive. To be fair, online revenue is growing nicely - up 69% in the recently-announced second quarter - while overall revenue dropped 3%. Unfortunately, there's more to the GameStop story than that.

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Investopedia: NCR Buys Its Way Into Another Vertical

Sometimes, organic growth just takes a little too long, or costs a little too much. NCR (NYSE:NCR), a maker of a variety of ATMs, self-service kiosks and point-of-sale terminals, announced that it has reached a deal to acquire Radiant Systems (Nasdaq:RADS) in an all-cash deal. Assuming this deal goes through to completion, NCR will significantly bolster its hospitality market presence and give it a third major industry group alongside finance and retail. 

NCR's Deal  
NCR announced that it will be acquiring Radiant Systems in a cash deal that values Radiant at $28 per share - about a 30% premium for Radiant shareholders. At a deal value of $1.2 billion, Radiant is going out for a little bit more than three times the forward revenue estimate and a trailing EV/EBITDA ratio around 15. That's a pretty healthy valuation, relative to Radiant's historical multiples, not to mention its likely forward free cash flow. (For related reading, see Taking Stock Of Discounted Cash Flow.)

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Investopedia: Coinstar - Maybe Not As Doomed As You Think

The doomsayers will be out in force on Coinstar (Nasdaq:CSTR) over the next few days. The company announced a significant miss for the fourth quarter, took down guidance for 2011 by a significant amount and acknowledged troubles with both inventory management and their assessment of the market. 

Queue the write-ups of "Coinstar is doomed!"

But maybe that is too hasty. Coinstar has problems, yes, and a difficult transition to come, but it may be a bit premature to grab the shovels and reserve a hearse.

Studios Sink Coinstar's Holiday
As Coinstar's management tells the tale, the underperformance in the fourth quarter can be laid at least in part at the feet of movie studios belonging to the likes of Time Warner (NYSE: TWX) and News Corp (NYSE:NWS).

Desirous of preserving their ridiculously profitable video-on-demand/pay-per-view and DVD sales, these studios basically forced Coinstar into accepting a 28-day window of exclusion; Coinstar cannot load its Redbox DVD rental kiosks with these new releases for 28 days. Given that the Redbox business model is predicated at least in part on impulse rentals of new movies, that's a serious blow, and that fed into the lower-than-expected same-store sales of 12.5% for the period.   

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Netflix Moves The Goalposts ... Again

It is hard not to love a company that sees the biggest threat(s) to its business model, and then embraces them. By no means did Netflix (Nasdaq:NFLX) invent the notion of streaming movies and TV to consumers, but it looks as though this company is fully embracing the idea and taking a forceful step towards not only be relevant, but continuing to be a leader in its market. 

Here We Go Again
The idea of Netflix doing something new in terms of delivering entertainment to customers is nothing new. It is an unofficial rule of business and investment writing that every mention of Netflix longer than two paragraphs includes mention of the fact that the company's direct-to-consumer mail DVD rental business basically killed Blockbuster and Movie Gallery. Now, with Coinstar's (Nasdaq:CSTR) Red Box kiosks offering legitimate competition for physical DVDs and Hulu an emerging player in online and streaming content, Netflix is more fully embracing streaming content. 


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