Investopedia: At A Minimum, Amazon Is Consistent

Although Amazon (Nasdaq:AMZN) is not close to being my favorite internet stock, it's hard for me not to admire the company on multiple levels. Not unlike, Google (Nasdaq: GOOG) Amazon isn't afraid to walk and chew bubblegum at the same time, and the company seems unafraid of flouting Wall Street's obsession over short-term growth by investing in multiple projects that likely won't produce meaningful margins for many years. While there's still a worry that investors will lose faith in the company's ability to generate strong margins and cash flows at some later date (and revise their opinion on “fair” multiples accordingly), Amazon seems focused on remaining a disruptive force in multiple markets.

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Investopedia: Netflix Results Are Always About Tomorrow

Subscription video service Netflix (Nasdaq:NFLX) posted good results relative to Wall Street expectations, but once again it's the company's view of the future that matters more than the trailing results. To that end, there's likely to be at least some negative fussing tied to a view of third quarter subscription growth that was a few percentage points below the average expectation. While I like the business that Netflix has, and I believe management has wisely carved out some points of distinction from the competition, it's tough to see how these shares are cheap.

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Investopedia: Slower Growth And Better Margins Probably Won't Help Amazon

If you ask most of the sell-side analysts and investors who follow Amazon.com (Nasdaq:AMZN) if they want high growth or stronger margins, I suspect that the answer will be “yes, both of those”. As a company with more than $100 billion in enterprise value and pretty eye-popping profit/earnings multiples, there are a lot of demands on Amazon and a lot of expectations about what the company ought to be. Although I do believe that Amazon's growth is likely to continue to slow (with improving margins) and that the cash flow-based valuation is reasonable, it won't surprise me if the stock stays stuck in this range of $255 to $275 for a little while longer.

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Investopedia: Amazon Seems Due For A Breather

For a company that has generally been very good at what it does, Amazon (Nasdaq:AMZN) gets no small amount of flack for its strategic decisions. Whether it's the decision to compete with Apple (Nasdaq:AAPL) in the tablet and digital media spaces, or its move into markets such as business-to-business MRO retailing and cloud services, there's no shortage of carping about Amazon's margins and its proclivities toward "empire-building."

And yet, Amazon has been a painful company to short. While there have been some notable swoons, the stock is up more than 250% over the past five years - well ahead of eBay (Nasdaq:EBAY) and Google (Nasdaq:GOOG) and on par with Apple's returns given the latter's recent fall from grace. Though I've long been an Amazon bull and believe this company has more innate margin and free cash flow (FCF) potential than the current numbers show, I think valuation is plenty rich for today.

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Investopedia: Dish Network May Not Be Cheap, But It'll Be Interesting

Like DIRECTV (Nasdaq:DTV), Dish Network (Nasdaq:DISH) must face the difficult reality that pay TV is not only a more competitive market with the entry of AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ). It also must compete with on-demand options offered by a host of services like Hulu and Netflix (Nasdaq:NFLX). Although the company doesn't look like a tremendous value today, it has a shrewd and savvy management team that could make things interesting.

Tough Times in Pay TV
For all of Dish Network's potential strategic options (more on this in a moment), the company's core satellite pay TV business has serious challenges. While Dish Network has a solid low-cost platform and offers products such as "Hopper" to its customers, the company has nevertheless been losing subs.

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http://www.investopedia.com/stock-analysis/2013/Dish-Network-May-Not-Be-Cheap-But-Itll-Be-Interesting-DISH-DTV-S-CLWR0115.aspx

Investopedia: Should Investors Direct Their Portfolio Toward DIRECTV?

Investors with a few gray hairs may remember when DIRECTV (Nasdaq:DTV) was a controversial stock, with plenty of doubters as to whether this company's satellite-based pay TV approach could ever make hay against likes of Comcast (Nasdaq:CMCSA). That debate is long over, and the company has proven that it can generate pretty significant amounts of cash flow. That doesn't mean that the stock still doesn't offer some controversy, though, with the debates now shifted as to whether the company can withstand the evolving competition of the pay TV market in the United States and continue to grow in Latin America.

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Investopedia: Should Debt Matter At Virgin Media?

In some respects, cable TV/Internet businesses ought to work like utilities. It takes a lot of capital to build the infrastructure, but once it's in place customers send in monthly checks like clockwork. It's never quite worked out that way, however, as seemingly never-ending capital demands have prevented many of these companies from turning into steady dividend-generating machines.

Virgin Media (Nasdaq:VMED) is an interesting case study. On one hand, the company's high-quality network is valuable and the company has consistently delivered on ARPU. On the other hand, the company faces competition from conventional competitors such as British Sky (Nasdaq:BSYBY) and BT Group (NYSE:BT), as well as content rivals such as Netflix (Nasdaq:NFLX), Amazon (Nasdaq:AMZN), Google (Nasdaq:GOOG) and Apple (Nasdaq:AAPL). Worse still, the company's huge debt load crushes a discounted cash flow model - leading to the question of how much debt should matter to investors.

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Investopedia: Bull Vs. Bear - Netflix Can Rise Back To $100

Question: Can Netflix Hit $100 Again?
Bull's Response
It's been a wild ride for Netflix (Nasdaq:NFLX). Once a darling of the "growth at any cost" crowd, Netflix stock enjoyed a rocket ride from late 2008 to mid-2011 that took it over $300 a share. Then came the "Apocaflix" strategic shift/marketing nightmare that not only confused and alienated customers, but dramatically dented investor and analyst confidence in the story. So now the question before is whether Netflix can hit $100 again. For those of you also considering this question, here's what I believe to be the main arguments for a bull case for Netflix reaching that level again.

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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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http://stocks.investopedia.com/stock-analysis/2012/Apple-May-Yet-Be-Unreasonably-Cheap-AAPL-GOOG-NOK-DELL0105.aspx

Investopedia: Amazon Still Rather Amazing

E-commerce giant Amazon (Nasdaq:AMZN) may still be deep in the shadows of Wal-Mart (NYSE:WMT) in terms of its reported sales, but there are precious few companies this size that are producing growth in excess of 40%. Although the Street was spooked by news that this fourth quarter could be a difficult one for this online retailer, investors would seem to have many more years of well above average growth in store with this name. (For more read Steady Growth Stocks Win The Race.)

Tricky Third Quarter Earnings  
Amazon is having no particular difficulty finding top-line growth, but that growth is coming at a cost. Reported revenue rose 44% this quarter, with organic revenue climbing 37%. Growth in media came in at 24%, with North American media sales growing 21%. Electronics and general merchandise looked strong at 59% growth (up 56% in North America), but this result was below most sell-side expectations.

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http://stocks.investopedia.com/stock-analysis/2011/Amazon-Still-Rather-Amazing-AMZN-BBY-BKS-NFLX-AAPL-EBAY-GOOG1027.aspx

Investopedia: It's Not Geting Any Easier For Google

Companies spend a lot of their corporate adolescence convincing investors that they can carve out a business and take on the big dogs. If they succeed, their reward is a new round of questions about whether or not the company can maintain that momentum and find new markets and opportunities that offer similar margins and returns. 


That, then, would seem to be the challenge for Google (Nasdaq:GOOG). No sane investor questions what the company has accomplished in taking on the likes of Yahoo! (Nasdaq:YHOO), AOL (NYSE:AOL), Microsoft (Nasdaq:MSFT) and Apple (Nasdaq:AAPL), but now the stock sentiment seems pregnant with doubts as to whether the company can find new business on par with the old.

A Mostly Encouraging Third Quarter
Google's third quarter results offer both good and bad news on that score. On the positive side, net revenue rose 37% (gross revenue rose 33%), and revenue from Google-owned sites was up 39 and 15%, sequentially. Mobile also continues to be strong grower, though still a relatively small contributor.


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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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http://stocks.investopedia.com/stock-analysis/2011/Netflix-Beats-A-Hasty-Retreat-NFLX-AAPL-AMZN-GOOG-DISH-CSTR-CMCSA1013.aspx

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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http://stocks.investopedia.com/stock-analysis/2011/Digital-May-Not-Solve-GameStops-Biggest-Problem-GME-NFLX-AMZN-BBY-MSFT-ERTS-CSTR0824.aspx

Investopedia: TiVo's Battle Only Beginning

It has been a multi-year roller coaster ride for TiVo (Nasdaq:TIVO) bulls, and yet plenty of volatility and uncertainty remains. Not only does the company have several significant IP lawsuits still in progress, but the company is a long way from establishing that it has a business model capable of producing attractive free cash flow in the years to come.

On the other hand, the company has won legal validation for its IP and signed up several major TV partners. With valuable technology and patents, and several large tech companies likely coveting the in-home reach and potential of this technology, TiVo could yet attract some interest from a bidder. As I said, the roller coaster ride isn't over yet.

First Quarter Results Include a Major Win and Significant Concerns  
There is no question that the company's settlement with DISH Network (Nasdaq:DISH) was a dominating factor this quarter. After another legal setback, DISH chose to take a settlement with TiVo - agreeing to pay $500 million in damages, with $300 million upfront and $200 million coming between 2012 and 2017. With that settlement, TiVo was profitable on an accounting basis. 

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Investopedia: Level 3 Getting Bigger; Better Remains To Be Seen

Investors who have supported Level 3 (Nasdaq:LVLT) through thick and thin have seen at least half of the investment thesis play out. Demand for bandwidth has indeed exploded, and broadband connectivity is everywhere. On the other hand, the profitability side of the thesis has just never worked out, and it has been a perennial question as to whether Level 3 will ever reap profits from its impressive fiber network. 

Level 3 is taking another big step in trying to drive profitability and free cash flow out of its assets, announcing on Monday that it would acquire rival Global Crossing (Nasdaq:GLBC) in a $3 billion stock deal. Assuming that the deal goes through, Level 3 should be able to drive some meaningful synergies, but it is an open question as to whether even this combined company will produce compelling returns on its huge asset base.


Terms of the Deal
Level 3 will be paying 16 of its own shares for every share of Global Crossing, a deal that valued Global Crossing at just a bit over $23 based on Friday's close. Level 3 will also be taking on $1.1 billion in Global Crossing debt, bringing the total value of the deal to $3 billion.

At those prices, Level 3 is paying almost eight-times trailing EBITDA, and valuing Global Crossing at about 1.2-times on an EV/revenue basis. So even though Level 3 is paying a 55% premium to acquire Global Crossing, it is still valuing its target at a lower multiple that it itself trades for currently.

Although not part of the deal itself per se, Level 3 has also announced a shareholder rights plan in conjunction with the deal. Now, this is not a run-of-the-mill rights plan; the sort that companies will issue in the name of "protecting" shareholders while actually only protecting their cushy seats. This plan is about limiting ownership stakes in Level 3 that could imperil the company's considerable tax loss carryforwards or net operating losses (NOL). (For related reading, check out A Sticky Fight Between Comcast And Level 3 Over The Web.)


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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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A Sticky Fight Between Comcast And Level 3 Over The Web

It seems like almost everybody enjoys a good tussle, but what do people do when both combatants seem unlikeable and disingenuous? That may end up being the dilemma for observers in the recent dust-up between Level 3 (Nasdaq:LVLT) and Comcast (Nasdaq:CMCSA). While the details of the dispute are arcane enough that it may only interest hard-core 'net-heads and those involved in the business side of the internet, the ramifications of this argument could stretch far and wide. 

The Facts, As They Seem  
Both Comcast and Level 3 are spinning the details of this dispute to cast themselves in the best possible light, and numerous commentators are aligning themselves as well (generally against Comcast, it seems), but here is what the dispute really covers. Comcast is complaining that Level 3 is sending far more content to Comcast than they are sending back to Level 3 and that Level 3 is effectively acting as a content delivery network (CDN) "in disguise." As a CDN, then, Comcast argues that Level 3 should be required to pay the same sort of fees that it charges to other acknowledged CDNs like Akamai (Nasdaq:AKAM) and Limelight (Nasdaq:LLNW). 



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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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http://stocks.investopedia.com/stock-analysis/2010/Netflix-Moves-The-Goalposts---Again-NFLX-CSTR-AAPL-GOOG-AMZN1124.aspx.

FinancialEdge: How Should Apple Spend Its Money?

Apple (Nasdaq:AAPL) has a problem - and it is a good problem to have. Products like the iPhone, iPod and MacBook, to say nothing of services like iTunes, have been so successful that Apple has accumulated more than $22 billion of cash and another $21 billion in long-term investments. With so much dry powder in the arsenal and persistent rumors about the health and legacy of CEO Steve Jobs, it seems reasonable to ask how the company might deploy this capital. Here are a few possible scenarios. 

Give it Back to Shareholders
This would be the simplest option, and there is no doubt that some shareholders would love to see a large-scale buyback or one-time dividend (or perhaps just a sustainably high regular dividend). Unfortunately, it seems like the least likely under current management. Simply giving back money and not applying it to some creative purpose seems very "un-Jobs-like," particularly when there are still mountains to climb and markets to conquer.

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http://financialedge.investopedia.com/financial-edge/0810/How-Should-Apple-Spend-Its-Money.aspx