Category Archives: Investments

Citi Cuts Apple’s Rating in Light of Low Expectations for iPhone 5

Investments, iPhone, , , , ,
Sales of iPhone 5 Not Gangbusters

Financial services company Citi has downgraded Apple’s rating from ‘buy’ to ‘neutral’ and lowered their price target to $575 due to their expectation that iPhone 5 sales will not be strong enough to prop up the stock.

Citi’s Apple analysts, Glen Yeung, Walter Pritchard and Jim Suva originally rated Apple ‘buy’ when they thought iPhone 5 sales would be impressive. UBS and Jefferies financial analysts also cut their price targets for Apple last week, but maintained the rating of ‘buy’ for the popular technology company.

Reports from Asian supply chains say that Apple has reduced their orders for the iPhone for 2013’s first quarter. It is logical that supply should be reduced after the holiday season somewhat, but Apple is cutting their production more than expected.

According to Citi, “Our checks suggest Apple has seen a 45-50% increase in monthly iPhone 5 production output October to December.” Since this improvement exceeded expectations it is not surprising that Apple is cutting orders for the beginning of the year.

It comes down to analysts at Citi believing that if iPhone 5 demand was high then Apple would continue to manufacture them at full-speed ahead. Since that is not the case and Apple is cutting production this signals to Citi that demand is only ‘good,’ and not ‘great,’ which is what Apple would need to get a ranking of ‘buy’ from Citi.

vRide: Paving the Way for a More Environmentally Sound Future

Investments, , , ,

In today’s society where gas is at a premium and rising every day, Michigan-based vRide has a sound and enviable solution. They are a ride sharing platform that offers commuters both an economical and environmentally friendly way to get to work. Now, they have a nation-wide challenge to try to get one million cars off the road. With the help of private equity investments, they are hoping to reach their lofty goal.

Founded in 1977 as a van pooling company, vRide forged a partnership with the private equity firm TPG Capital in 2010. TPG has patiently assisted vRide with growth capital, a strategic focus and management and operational expertise. vRide has a national presence with over 40 offices that offer van pooling in every single state.

As vRide CEO Ann Fandozzi explained, “Private equity does in fact help businesses realize their dreams. If you don’t have access to resources both in terms of knowledge base and funds, most ideas die. At the end of the day, it’s no more complicated than that.”

vRide’s figures for the environment are impressive today. They save commuters up to $5000 a year and have more than 5000 daily active vanpools with over 50,000 commuters. They estimate that they help to eliminate about 78 million vehicle miles each year, taking over 800,000 cars off of the highways and roads every month.

Learn more about vRide and their experience with private equity.

Start-Ups Benefitting from Corporate Investment Surge

Investments, , , , ,
Start-Ups Backed by Large Corporate Funding On the Rise

Venture groups backed by corporate finances invested over $2.1 billion during the second quarter of 2012, a 16 percent increase compared to the same period in 2011. The flow of money into start-ups underscores the attraction the potential for high growth has to their more established competitors despite the advisers struggling with hedge fund risk management.

The investments are being placed in about 118 US companies, one third of the money going to internet-based firms, according to a report which appeared today released by CB Insights, a consulting company.

Healthcare and car/transportation related start-ups taking up about 20 percent each.

Most of the transactions involved investors from traditional firms which specialize in venture capital deals, such as Sequoia Capital, Index Ventures, and First Round Capital.

Large corporations have a vested interest in start-ups so that they can carefully observe the development of new technologies and the talent in their fields of expertise. The main motivators are the strategic decisions and directions made by the smaller and more innovative companies, rather than the potential financial gain which may or may not be realized.

January Best Month Since October on Wall Street

Economy, Investments, , , ,

As January ended yesterday Wall Street celebrated what investors there are saying was their best month since October, 2011. The optimistic attitude was maintained despite the disappointing weaker-than-expected performance which was reported in Tuesday’s economic reports, which surprised investors after a receiving a series of positive data about the economy in recent months.

According to the most recent data available, the Dow Jones Industrial average closed the session at 12,633.89, down 19.83 points or 0.16 percent. The Standard & Poor’s 500 Index was also down by 0.55 points, 0.04 percent to close at 1,312.46. The Nasdaq Composite Index finished up, however, by 1.46 points, or 0.05 percent, at 2,813.40.

The month of January ended up, with the Dow up by 3.4 percent, the S&P 500 up by 4.4 percent, and the Nasdaq finished in the black by a cool 8 percent.

Oil Prices Climb to $99 Range

Commodities, Investments, , , , ,

The price of crude oil approached just below $99 a barrel on Wednesday in Asia due to investor’s reaction to a surge in US oil supply inventories combined with slower than hoped-for economic growth.

The price of benchmark crude, to be delivered in March, climbed by 15 cents to $98.63 per barrel in Singapore in the late afternoon, just in time to make the electronic trading deadline on the New York Mercantile Exchange. By the end of the trading day the contract’s price fell by 30 cents to rest at $98.48 on Tuesday.

Brent crude also rose by 19 cents per barrel, to settle at $111.17 on the ICE Futures Exchange in London.

According to the American Petroleum Institute, crude inventories went up by 2.1 million barrels last week. In a survey conducted by Platts, the energy information section of McGraw-Hill Companies, of analysts’ predictions, they found that there had been a prediction of an increase in the inventories of 3.0 million barrels.

"U.S. economic releases tilted toward the bearish side, and that these figures followed last Friday's negative GDP guidance conjured up images of some disappointing employment data," energy consultant Ritterbusch and Associates said in a report. "A difficult, choppy trading environment could be sustained well into February."