We all know Netflix (NFLX) as the company that provides DVDs by postal mail. Some time ago, they added a feature where you can logon to their Netflix.com site, and watch selected movies through the internet browser without affecting the normal DVD by mail schedule.
However, watching a full two hour movie in front of one's Computer will not be a good experience. People have invested much money in their couches, high definition TVs and home entertainment sound systems. The next step is delivering content, such as DVD content from the home computer and internet to the comfort of the Digital Living room.
Apple (AAPL) attempted to market a similar solution using AppleTV but this product has not taken off.
Tivo (TIVO) is offering another option. Aside from providing Digital Video Recorder Functionality (DVR), Tivo is also working together with Amazon Unbox program where users of Tivo can download movies purchased or rented from Amazon.com (AMZN).
Netflix's Solution to the Digital Living Room
Now, Netflix is part of the competition for the Digital Living Room, Netflix is also now taking this route with its partnership with Roku. For $99, Roku is providing a special set top box where special on-demand movies from Netflix can be streamed directly to your living room television.
This service will not affect the normal DVD by postal mail service of Netflix.
Will this product work? I have recently ordered a Roku box and will try it out.
More details on the Roku Netflix Player here.
The battle for the Digital Living Room continues, and let us keep track of the trends in this area.
Showing posts with label youtube. Show all posts
Showing posts with label youtube. Show all posts
Wednesday, May 21, 2008
Saturday, July 14, 2007
The Sectors in Bull Market Mode
We are in a bull market right now, with the S&P at all time highs, and the Dow near all time highs. So what sectors are working now? What are the long term trends worth investing in? (In this article, trends mean 3 years or longer.)
1. Agriculture:
In 2002, there was an influential US Farm Bill, "The Farm Security and Rural Investment Act of 2002." Prior to this, according to a Forbes Article, " few stocks had big moves prior to the enactment of the 2002 farm bill. Consider AGCO (AG), which sells combines and other farm equipment. Over the course of the year prior to the May 2002 signing of the farm bill, AGCO's shares climbed 150%, vs. a 14% decline for the S&P 500. Archer Daniels Midland (ADM) and Deere & Co. (DE), though not as frothy, also rose nicely in that time period." The push towards Ethanol is also another reason for the bull market in agriculture.
Jim Cramer prefers Deere (DE), who makes the agriculture farm equipment, Monsanto (MON), a biotech company that makes the seeds, and Chemical and Mining Co. of Chile (SQM), a fertilizer play in the agricultural sector.
Forbes likes companies such as Archer Daniels Midlands (ADM), AGCO (AG), and CNH Global (CNH), among many companies in the list they provide as beneficiaries of the farm bill.
2. Machinery
Similar to the farm bill, the $287 Billion US Transportation-spending law in 2005 has been good to machinery stocks. Beneficiaries include companies such as Caterpillar (CAT), and Terex (TEX). As a bonus, companies like Caterpillar (makes of construction equipment), have international exposure as well.
3. Infrastructure
In this area, Jim Cramer likes Foster Wheeler (FWLT) and McDermott (MDR). Foster Wheeler, "provides engineering and construction services to the oil and gas, oil refining, chemical/petrochemical, pharmaceutical, environmental, power generation, and power plant operation and maintenance sectors worldwide. It operates through two groups, Global Engineering and Construction Group (Global E&C Group), and Global Power Group." McDermott (MDR) "operates in three segments: Offshore Oil and Gas Construction, Government Operations, and Power Generation Systems."
Fluor (FLR), is another company in this area. Again, this sector also benefits from global growth.
4. Aerospace and Defense
All those old civilian and military planes need to be replaced. We are in the middle of long aerospace cycle. The main play is Boeing (BA), who benefits from the cycle and also from Airbus' troubles. Other companies in this area include BE Aerospace (BEAV), which manufactures and markets cabin interior products for commercial aircraft and business jets, Northrop Grumman (NOC), an aerospace and defense company, Embraer (ERJ), maker of jet and turboprop aircrafts for civil and defense aviation markets, and Transdigm Group (TDG), a 2 Billion Market Capitalized Company that "engages in the design, production, and supply of engineered aircraft components for use in commercial and military aircraft worldwide." Indirectly, companies such as Allegheny Technology (ATI), creator of specialty metals, benefits from this cycle, as newer planes need lighter materials to save fuel.
5. Oil, Gas, and Energy
Oil, Gas and Energy are in bull market mode because demand is high, and supply is low. The US and Emerging Markets need these to continue their fast growth. And supply is limited, so aside from oil, oil services company which do offshore drilling, supply services to oil companies, companies which search for oil, companies that make and manage offshore rigs are benefitting greatly.
Companies include integrated oil companies such as Exxon Mobil (XOM) and Conoco Philips (COP), oil services companies such as Halliburton (HAL), and Schlumberger (SLB), refiners such as Valero (VLO), offshore drillers such as Global Santa Fe (GSF) and Ensco (ESV), transport vessels for offshore oil services such as Tidewater (TDW), and oil services and rig companies such as National Oilwell Varco (NOV) and Transocean (RIG).
6. Minerals
Gold, Copper, Silver, and other materials are in bull market mode. Once again, this is low supply, high demand. The US, as well as emerging and other international markets are growing! They have an insatiable appetite for these materials. Companies include Freeport-McMoran (FCX), a gold and copper company, and Jim Cramer suggests Lundin Mining (LMC) as well, as the runner up.
7. Telecom especially Emerging Market (Wireless) Telecom
Wireless use, and advanced telecom services such as mobile internet, are growing around the world. Products such as the Apple (AAPL) Iphone, and Research in Motion's (RIMM) Blackberry help drive demand, and countries around the world are increasingly using these services. In the US and in Europe and in Japan, wireless penetration is reaching levels from 70-100%. However in Emerging Markets such as Mexico, and Latin America, wireless penetration is at much lower levels, and is expected to hit 60% penetration in the region only in 2010. That means that there is great opportunity and growth in this area. As an example, Mexican (and South American) telecom play, America Movil (AMX), still has a forward PE of only 15.51, and a 5 yr estimated growth rate of 31.6%, for a PE to Growth ratio of around 0.5, very cheap!
While AT&T (T) is a play on North America Telecom, the greater growth (at a reasonable price) is in emerging markets. Companies include America Movil (AMX), for Mexico and South America, NII Holdings (NIHD) for Latin America, Vimpel Communications (VIP) for Russia, China Mobile (CHL) for China, and Vodaphone (VOD) for Europe, Middle East, Asia and Africa.
8. Mobile Convergence/Wireless Integrated Devices/Handsets
Mobile convergence, where different technologies such as voice, data, and video come together in a single handset, is continuing to grow at a rapid pace. Leaders include Apple (AAPL) with their new handset, Research in Motion's (RIMM) popular Blackberry product, and other companies like Nokia (NOK). As new services emerge, the infrastructure to provide fast, high quality video on these mobile devices will play an important role.
9. Location Based Services
Location based services currently depend on GPS, the Global Positioning System. The companies which use these technlogies are doing well in the market, and will continue to do well, as anything that moves, from cars, with automatic navigation devices, to military weapons, to people holding mobile converged devices such as advanced cellphones will have GPS. Garmin (GRMN) is a company which provides Location Based Product devices. Navteq (NVT) is a company which provides the digital maps, and its competitor is a private company called Tele-Atlas. Sirf Technlogies (SIRF) makes GPS chips. Though it has struggled in the recent past, there are signs that the stock is stabilizing. Competitor includes Broadcom, who bought out their competitor Global Locate. Trimble Navigation (TRMB) is another company providing GPS systems. They even bought the company AtRoad, which tracks fleets of vehicles. Software maker MapInfo (formerly MAPS), was recently bought out by Pitney Bowes (PBI). Indirectly, telecoms will benefit, advanced handset makers will benefit, and companies such as Google (GOOG), may be prime candidates in creating location based service applications such as local GPS search supported by location based advertising. There is great growth in this industry!
10. Computer and Video gaming
Computer and Video gaming are in the middle of a strong cycle, as three major gaming consoles are out from Sony (SNE), Microsoft (MSFT), and Nintendo (NTDOY.pk). Sony also has the portable gaming device Sony PSP, and Nintendo has the portable gaming device Nintendo DS. Demographics also support growth as Generation Y is the 2nd largest group (after the Baby Boomers), and many people in Generation Y like to play games. There are many plays in this sector from Retailers (Gamestop (GME)), console makers (Nintendo (NTDOY.pk)), game makers (Electronic Arts (ERTS), Activision (ATVI)), graphic chip makers (NVidia (NVDA)), and gaming accessories (Logitech (LOGI)). More on this sector and analysis by the numbers here.
11. Online Gaming in Emerging Markets such as China
There is great growth in online gaming, especially in China. There is a growing middle class, and increasing broadband penetration (internet cafes included). In China and Korea, online gaming has become a very popular pasttime. Two good online gaming plays in China include Shanda Interactive (SNDA), and The9 Limited (NCTY) who has the right to bring World of Warcraft to China. Shanda Interactive has a free model where people can play the games for free, but pay real money for items in the game. Article on the Growing Online Gaming Market in Emerging Markets here.
12. Internet, Search, and Internet Video
The internet, the backbone of the major Information Revolution, remains strong. People need to find relevant information from all the data, and companies like Yahoo (YHOO) and Google (GOOG) help do this. Google (GOOG), the groups bellwether company, even purchased YouTube, a popular internet video company. Baidu (BIDU) and Rediff (REDF) service both the Chinese and India markets. Brick and Mortar Retailing continues to be challenged by internet retailing spearheaded by Amazon.com (AMZN) and EBay (EBAY). Infrastructure companies, such as Akamai (AKAM), help make delivery of information better and faster.
13. International Emerging Markets
Emerging markets such as Taiwan, Korea, South Africa, China, Mexico, Brazil, India and China are in bull market mode. This trend will last more than a few years, and this would appear to be part of a much longer trend. Since many companies benefit, an investor could invest in a broad based Emerging Market Exchange Traded Fund such as ishares EEM, and Vanguard's VWO.
Other Sectors to Watch
Besides the sectors which are working well right now, there are other sectors worth watching. Some may start their run right now, while others may take more time to make their gains.
1. Optical Networking and Networking
More data is being placed on the internet, especially internet video. High Definition (which requires more bandwidth) will become more of a standard. Advanced services such as Internet TV (IPTV), and video demand will require much greater bandwidth. Eventually, the system will not be able to handle the demand for greater bandwidth. Next generation applications will require much greater bandwidth. Right now, even AT&T's top DSL Broadband package supports 6 Megabits per second (mbps). In Korea, broadband penetration is around 70%, and their internet speeds go up to 50 mbps, over 8 times faster than AT&T's top speed. The US is behind some countries such as Korea!
Optical Networking is a way to get much better download speeds. The best way to play this is througn Corning Glassware (GLW), who have the added benefit of servicing LCD and flat panel displays (another growth area). Ciena (CIEN) is an optical networking play. Speculative plays include $6 stock Level 3 Communications (LVLT) and $4 stock Finisar (FNSR).
I believe we are the verge of a breakout in the Optical area.
2. Obesity
Obesity is a long term problem. Two possible ways to play this trend are through Weight Watchers (WTW) and NutriSystem (NTRI). NutriSystem looks like the good growth play right now.
3. Specialty clothing
Certain companies just have a special story and product. A good example is Crocs (CROX), maker of a very popular type of footwear. Other companies include UnderArmour (UA) and Gildan Activewear (GIL).
4. Long-Term Care Facilities
Parents of Baby Boomers and eventually the Baby Boomers may need to use Long Term Care Facilities such as Manor Care (HCR), Brookdale Senior Living (BKD), and Sunrise Senior Living (SRZ). We need to watch this group for better action.
5. Healthcare Information System
Eventually, healthcare needs to have integrated software systems. The companies which provide these solutions include Cerner (CERN), Allscripts (MDRX), and Quality Systems (QSII). While this is a growth area, we may have to study the companies carefully to determine the better play.
6. Specialty and Niche Product Companies
Companies which provide a specialty or niche product have a competitive advantage. Examples might be #2 Energy Drink Maker Hansen Natural (HANS), and robotic surgery company Intuitive Surgical (ISRG).
7. Gambling Companies
There is great growth in the gambling and gambling equipment industry. Macau, in Asia, is being transformed into the Las Vegas of the East, and many companies can benefit. If internet gambling (which has taken a hit based on some laws restricting them in the US) comes back, this group will grow even more. Some companies in the gambling and gaming area include Las Vegas Sands (LVS), and MGM Mirage (MGM). Gaming equipment companies include International Gaming Technlogy (IGT), Scientific Games (SGMS), and ShuffleMaster (SHFL).
8. Leisure and Entertainment
Baby Boomers are in their peak spending years which may finally peak in 2010, until Generation Y comes of age. Also, Generation Y, as represented by Generation Y reporter of TheStreet.com Cliff Mason, appears to be more willing to spend money on leisure and entertainment. During these periods, leisure and entertainment companies should benefit.
Companies in this sector include gambling companies and gambling equipment companies (as mentioned above), hotels and resorts such as Starwood Hotels and resorts (HOT), Cruise Ship Companies such as Carnival Corp (CCL), and companies such as Vail Resorts (VAIL) and food and restaurant companies such as Darden (DRI). Powershares ETF "PEJ" covers this area, and the companies in the ETF are listed here.
9. Water
Some people say that water, and clean water, may be the next oil. An ETF which covers this area is powershares PHO, which holds companies such as Mueller Water Products (MWA) and Tetra Tech (TTEK).
10. Environmental Cleanup and Waste Management
Some companies have to cleanup our mess and all or waste including industrial waste, and radioactive waste. According to a Motley Fool article, the trends driving growth in this sector include growth in consumer spending on disposable items in growing populations. Also, there is a rise in industrial waste services as more companies utilize hazardous products in production facilities. There is a greater concern for the environment, so these companies will benefit. Companies in this area include Waste Management (WMI), Clean Harbor (CLHB), and American Ecology (ECOL).
11. Stock Exchanges
Stock Exchanges are in bull market mode. There is great consolidation in this area, and people speculate there may be only a few worldwide stock exchanges. Companies include the InterContinental Exchange (ICE), Nasdaq (NDAQ), New York Stock Exchange-Euronext (NYX), CME Group (CME), and Nymex (NMX).
12. Future Gen Y Plays: Housing, Automobiles, Weddings, Babies
Yes, housing is down right now, but we have to look many years into the future. Generation Y is a very large group, second only to the Baby Boomers. They will eventually (many years from now) be buying their first homes. They will also make other large purchases such as automobiles, and many will be getting married, and having babies. This sector trend will be good for companies in these areas, but we may have to wait many years to play these trends.
Credits
Through my research and experience, I found these bull markets. Jim Cramer mentions six wild bull markets, and those six are incorporated above (with my comments), and a long time ago, Jim Cramer also suggested looking into areas such as HealthCare Information Systems.
1. Agriculture:
In 2002, there was an influential US Farm Bill, "The Farm Security and Rural Investment Act of 2002." Prior to this, according to a Forbes Article, " few stocks had big moves prior to the enactment of the 2002 farm bill. Consider AGCO (AG), which sells combines and other farm equipment. Over the course of the year prior to the May 2002 signing of the farm bill, AGCO's shares climbed 150%, vs. a 14% decline for the S&P 500. Archer Daniels Midland (ADM) and Deere & Co. (DE), though not as frothy, also rose nicely in that time period." The push towards Ethanol is also another reason for the bull market in agriculture.
Jim Cramer prefers Deere (DE), who makes the agriculture farm equipment, Monsanto (MON), a biotech company that makes the seeds, and Chemical and Mining Co. of Chile (SQM), a fertilizer play in the agricultural sector.
Forbes likes companies such as Archer Daniels Midlands (ADM), AGCO (AG), and CNH Global (CNH), among many companies in the list they provide as beneficiaries of the farm bill.
2. Machinery
Similar to the farm bill, the $287 Billion US Transportation-spending law in 2005 has been good to machinery stocks. Beneficiaries include companies such as Caterpillar (CAT), and Terex (TEX). As a bonus, companies like Caterpillar (makes of construction equipment), have international exposure as well.
3. Infrastructure
In this area, Jim Cramer likes Foster Wheeler (FWLT) and McDermott (MDR). Foster Wheeler, "provides engineering and construction services to the oil and gas, oil refining, chemical/petrochemical, pharmaceutical, environmental, power generation, and power plant operation and maintenance sectors worldwide. It operates through two groups, Global Engineering and Construction Group (Global E&C Group), and Global Power Group." McDermott (MDR) "operates in three segments: Offshore Oil and Gas Construction, Government Operations, and Power Generation Systems."
Fluor (FLR), is another company in this area. Again, this sector also benefits from global growth.
4. Aerospace and Defense
All those old civilian and military planes need to be replaced. We are in the middle of long aerospace cycle. The main play is Boeing (BA), who benefits from the cycle and also from Airbus' troubles. Other companies in this area include BE Aerospace (BEAV), which manufactures and markets cabin interior products for commercial aircraft and business jets, Northrop Grumman (NOC), an aerospace and defense company, Embraer (ERJ), maker of jet and turboprop aircrafts for civil and defense aviation markets, and Transdigm Group (TDG), a 2 Billion Market Capitalized Company that "engages in the design, production, and supply of engineered aircraft components for use in commercial and military aircraft worldwide." Indirectly, companies such as Allegheny Technology (ATI), creator of specialty metals, benefits from this cycle, as newer planes need lighter materials to save fuel.
5. Oil, Gas, and Energy
Oil, Gas and Energy are in bull market mode because demand is high, and supply is low. The US and Emerging Markets need these to continue their fast growth. And supply is limited, so aside from oil, oil services company which do offshore drilling, supply services to oil companies, companies which search for oil, companies that make and manage offshore rigs are benefitting greatly.
Companies include integrated oil companies such as Exxon Mobil (XOM) and Conoco Philips (COP), oil services companies such as Halliburton (HAL), and Schlumberger (SLB), refiners such as Valero (VLO), offshore drillers such as Global Santa Fe (GSF) and Ensco (ESV), transport vessels for offshore oil services such as Tidewater (TDW), and oil services and rig companies such as National Oilwell Varco (NOV) and Transocean (RIG).
6. Minerals
Gold, Copper, Silver, and other materials are in bull market mode. Once again, this is low supply, high demand. The US, as well as emerging and other international markets are growing! They have an insatiable appetite for these materials. Companies include Freeport-McMoran (FCX), a gold and copper company, and Jim Cramer suggests Lundin Mining (LMC) as well, as the runner up.
7. Telecom especially Emerging Market (Wireless) Telecom
Wireless use, and advanced telecom services such as mobile internet, are growing around the world. Products such as the Apple (AAPL) Iphone, and Research in Motion's (RIMM) Blackberry help drive demand, and countries around the world are increasingly using these services. In the US and in Europe and in Japan, wireless penetration is reaching levels from 70-100%. However in Emerging Markets such as Mexico, and Latin America, wireless penetration is at much lower levels, and is expected to hit 60% penetration in the region only in 2010. That means that there is great opportunity and growth in this area. As an example, Mexican (and South American) telecom play, America Movil (AMX), still has a forward PE of only 15.51, and a 5 yr estimated growth rate of 31.6%, for a PE to Growth ratio of around 0.5, very cheap!
While AT&T (T) is a play on North America Telecom, the greater growth (at a reasonable price) is in emerging markets. Companies include America Movil (AMX), for Mexico and South America, NII Holdings (NIHD) for Latin America, Vimpel Communications (VIP) for Russia, China Mobile (CHL) for China, and Vodaphone (VOD) for Europe, Middle East, Asia and Africa.
8. Mobile Convergence/Wireless Integrated Devices/Handsets
Mobile convergence, where different technologies such as voice, data, and video come together in a single handset, is continuing to grow at a rapid pace. Leaders include Apple (AAPL) with their new handset, Research in Motion's (RIMM) popular Blackberry product, and other companies like Nokia (NOK). As new services emerge, the infrastructure to provide fast, high quality video on these mobile devices will play an important role.
9. Location Based Services
Location based services currently depend on GPS, the Global Positioning System. The companies which use these technlogies are doing well in the market, and will continue to do well, as anything that moves, from cars, with automatic navigation devices, to military weapons, to people holding mobile converged devices such as advanced cellphones will have GPS. Garmin (GRMN) is a company which provides Location Based Product devices. Navteq (NVT) is a company which provides the digital maps, and its competitor is a private company called Tele-Atlas. Sirf Technlogies (SIRF) makes GPS chips. Though it has struggled in the recent past, there are signs that the stock is stabilizing. Competitor includes Broadcom, who bought out their competitor Global Locate. Trimble Navigation (TRMB) is another company providing GPS systems. They even bought the company AtRoad, which tracks fleets of vehicles. Software maker MapInfo (formerly MAPS), was recently bought out by Pitney Bowes (PBI). Indirectly, telecoms will benefit, advanced handset makers will benefit, and companies such as Google (GOOG), may be prime candidates in creating location based service applications such as local GPS search supported by location based advertising. There is great growth in this industry!
10. Computer and Video gaming
Computer and Video gaming are in the middle of a strong cycle, as three major gaming consoles are out from Sony (SNE), Microsoft (MSFT), and Nintendo (NTDOY.pk). Sony also has the portable gaming device Sony PSP, and Nintendo has the portable gaming device Nintendo DS. Demographics also support growth as Generation Y is the 2nd largest group (after the Baby Boomers), and many people in Generation Y like to play games. There are many plays in this sector from Retailers (Gamestop (GME)), console makers (Nintendo (NTDOY.pk)), game makers (Electronic Arts (ERTS), Activision (ATVI)), graphic chip makers (NVidia (NVDA)), and gaming accessories (Logitech (LOGI)). More on this sector and analysis by the numbers here.
11. Online Gaming in Emerging Markets such as China
There is great growth in online gaming, especially in China. There is a growing middle class, and increasing broadband penetration (internet cafes included). In China and Korea, online gaming has become a very popular pasttime. Two good online gaming plays in China include Shanda Interactive (SNDA), and The9 Limited (NCTY) who has the right to bring World of Warcraft to China. Shanda Interactive has a free model where people can play the games for free, but pay real money for items in the game. Article on the Growing Online Gaming Market in Emerging Markets here.
12. Internet, Search, and Internet Video
The internet, the backbone of the major Information Revolution, remains strong. People need to find relevant information from all the data, and companies like Yahoo (YHOO) and Google (GOOG) help do this. Google (GOOG), the groups bellwether company, even purchased YouTube, a popular internet video company. Baidu (BIDU) and Rediff (REDF) service both the Chinese and India markets. Brick and Mortar Retailing continues to be challenged by internet retailing spearheaded by Amazon.com (AMZN) and EBay (EBAY). Infrastructure companies, such as Akamai (AKAM), help make delivery of information better and faster.
13. International Emerging Markets
Emerging markets such as Taiwan, Korea, South Africa, China, Mexico, Brazil, India and China are in bull market mode. This trend will last more than a few years, and this would appear to be part of a much longer trend. Since many companies benefit, an investor could invest in a broad based Emerging Market Exchange Traded Fund such as ishares EEM, and Vanguard's VWO.
Other Sectors to Watch
Besides the sectors which are working well right now, there are other sectors worth watching. Some may start their run right now, while others may take more time to make their gains.
1. Optical Networking and Networking
More data is being placed on the internet, especially internet video. High Definition (which requires more bandwidth) will become more of a standard. Advanced services such as Internet TV (IPTV), and video demand will require much greater bandwidth. Eventually, the system will not be able to handle the demand for greater bandwidth. Next generation applications will require much greater bandwidth. Right now, even AT&T's top DSL Broadband package supports 6 Megabits per second (mbps). In Korea, broadband penetration is around 70%, and their internet speeds go up to 50 mbps, over 8 times faster than AT&T's top speed. The US is behind some countries such as Korea!
Optical Networking is a way to get much better download speeds. The best way to play this is througn Corning Glassware (GLW), who have the added benefit of servicing LCD and flat panel displays (another growth area). Ciena (CIEN) is an optical networking play. Speculative plays include $6 stock Level 3 Communications (LVLT) and $4 stock Finisar (FNSR).
I believe we are the verge of a breakout in the Optical area.
2. Obesity
Obesity is a long term problem. Two possible ways to play this trend are through Weight Watchers (WTW) and NutriSystem (NTRI). NutriSystem looks like the good growth play right now.
3. Specialty clothing
Certain companies just have a special story and product. A good example is Crocs (CROX), maker of a very popular type of footwear. Other companies include UnderArmour (UA) and Gildan Activewear (GIL).
4. Long-Term Care Facilities
Parents of Baby Boomers and eventually the Baby Boomers may need to use Long Term Care Facilities such as Manor Care (HCR), Brookdale Senior Living (BKD), and Sunrise Senior Living (SRZ). We need to watch this group for better action.
5. Healthcare Information System
Eventually, healthcare needs to have integrated software systems. The companies which provide these solutions include Cerner (CERN), Allscripts (MDRX), and Quality Systems (QSII). While this is a growth area, we may have to study the companies carefully to determine the better play.
6. Specialty and Niche Product Companies
Companies which provide a specialty or niche product have a competitive advantage. Examples might be #2 Energy Drink Maker Hansen Natural (HANS), and robotic surgery company Intuitive Surgical (ISRG).
7. Gambling Companies
There is great growth in the gambling and gambling equipment industry. Macau, in Asia, is being transformed into the Las Vegas of the East, and many companies can benefit. If internet gambling (which has taken a hit based on some laws restricting them in the US) comes back, this group will grow even more. Some companies in the gambling and gaming area include Las Vegas Sands (LVS), and MGM Mirage (MGM). Gaming equipment companies include International Gaming Technlogy (IGT), Scientific Games (SGMS), and ShuffleMaster (SHFL).
8. Leisure and Entertainment
Baby Boomers are in their peak spending years which may finally peak in 2010, until Generation Y comes of age. Also, Generation Y, as represented by Generation Y reporter of TheStreet.com Cliff Mason, appears to be more willing to spend money on leisure and entertainment. During these periods, leisure and entertainment companies should benefit.
Companies in this sector include gambling companies and gambling equipment companies (as mentioned above), hotels and resorts such as Starwood Hotels and resorts (HOT), Cruise Ship Companies such as Carnival Corp (CCL), and companies such as Vail Resorts (VAIL) and food and restaurant companies such as Darden (DRI). Powershares ETF "PEJ" covers this area, and the companies in the ETF are listed here.
9. Water
Some people say that water, and clean water, may be the next oil. An ETF which covers this area is powershares PHO, which holds companies such as Mueller Water Products (MWA) and Tetra Tech (TTEK).
10. Environmental Cleanup and Waste Management
Some companies have to cleanup our mess and all or waste including industrial waste, and radioactive waste. According to a Motley Fool article, the trends driving growth in this sector include growth in consumer spending on disposable items in growing populations. Also, there is a rise in industrial waste services as more companies utilize hazardous products in production facilities. There is a greater concern for the environment, so these companies will benefit. Companies in this area include Waste Management (WMI), Clean Harbor (CLHB), and American Ecology (ECOL).
11. Stock Exchanges
Stock Exchanges are in bull market mode. There is great consolidation in this area, and people speculate there may be only a few worldwide stock exchanges. Companies include the InterContinental Exchange (ICE), Nasdaq (NDAQ), New York Stock Exchange-Euronext (NYX), CME Group (CME), and Nymex (NMX).
12. Future Gen Y Plays: Housing, Automobiles, Weddings, Babies
Yes, housing is down right now, but we have to look many years into the future. Generation Y is a very large group, second only to the Baby Boomers. They will eventually (many years from now) be buying their first homes. They will also make other large purchases such as automobiles, and many will be getting married, and having babies. This sector trend will be good for companies in these areas, but we may have to wait many years to play these trends.
Credits
Through my research and experience, I found these bull markets. Jim Cramer mentions six wild bull markets, and those six are incorporated above (with my comments), and a long time ago, Jim Cramer also suggested looking into areas such as HealthCare Information Systems.
Tuesday, June 5, 2007
Video on Demand Trade; Death of DVD
Video on Demand Plays
CNBC's show Fast Money on June 5, 2007, featured a segment on playing the Video-on-Demand trend in the Digital Living Room. They started the segment saying that when DVDs come out, movie studios will send the movies direct to Video-On-Demand Systems as well.
1. Jeff Macke one of the traders suggests:
Releasing DVD and VOD (Video on Demand at the same time) helps the studios capture more of the margin. The rental business isn't that great for the studios. So the trade becomes: Long Disney (DIS) or any movie studio. Also, good plays are Comcast (CMCSA) because VOD is good for them. Companies like Blockbluster (BBI) and Netflix (NFLX) will get killed by this.
2. Eric Bolling:
Short BBI. Winner is Comcast (CMCSA) and other Content Distributors.
3. Guy Adami:
Long Lions Gate (LGF)
Joost Plays
Joost and internet video on Fast Money: There is a trend towards peer-to-peer model vs. a central server model (like YouTube). With the peer-to-peer model (from big players), downloads can be faster and legal. Get content direct from a CBS (CBS), Time Warner (TWX), or Viacom (VIA) or some other big player. There is also an advertising aspect, as Joost might be able to use this information to do targeted (more effective) ads.
Associated with this company are two publicly traded companies, CBS, and Viacom (VIA). One of the reporters speculates that it might be a good takeover target for one of the media players.
1. Eric Bolling:
Doesn't like it because it is not user generated. There are too many ways to get non user generated videos.
CNBC's show Fast Money on June 5, 2007, featured a segment on playing the Video-on-Demand trend in the Digital Living Room. They started the segment saying that when DVDs come out, movie studios will send the movies direct to Video-On-Demand Systems as well.
1. Jeff Macke one of the traders suggests:
Releasing DVD and VOD (Video on Demand at the same time) helps the studios capture more of the margin. The rental business isn't that great for the studios. So the trade becomes: Long Disney (DIS) or any movie studio. Also, good plays are Comcast (CMCSA) because VOD is good for them. Companies like Blockbluster (BBI) and Netflix (NFLX) will get killed by this.
2. Eric Bolling:
Short BBI. Winner is Comcast (CMCSA) and other Content Distributors.
3. Guy Adami:
Long Lions Gate (LGF)
Joost Plays
Joost and internet video on Fast Money: There is a trend towards peer-to-peer model vs. a central server model (like YouTube). With the peer-to-peer model (from big players), downloads can be faster and legal. Get content direct from a CBS (CBS), Time Warner (TWX), or Viacom (VIA) or some other big player. There is also an advertising aspect, as Joost might be able to use this information to do targeted (more effective) ads.
Associated with this company are two publicly traded companies, CBS, and Viacom (VIA). One of the reporters speculates that it might be a good takeover target for one of the media players.
1. Eric Bolling:
Doesn't like it because it is not user generated. There are too many ways to get non user generated videos.
Thursday, May 31, 2007
Will AppleTV be a dud?
Will the greatly hyped AppleTV be a dud? According to Brent Schendler at Fortune, AppleTV is a dud. They even included alternative uses for AppleTV including a Sushi Platter: 
Some complaints he makes include the low quality of videos. "it requires an HDTV, but the video you download is so low-res that it looks as fuzzy as plain old broadcast TV" -- Brent Schendler.
Another is that there is no way to order a movie directly from the iTunes store via your TV. You have to manually download it to your computer first.
On the positive side, YouTube and Apple made an agreement to broadcast YouTube through the Apple TV interface. Together with Apple's iTune monopoly which can be broadcast to the living room TV, Apple may have a chance to succeed with the concept of AppleTV.
But at this time, I don't think the product and technology is fully mature and widespread adoption may take some time. There's a user who says that he's been watching YouTube Videos on his Nintendo Wii for some time. There's another user on a bulletin board echo the complaints of the bad quality of the videos. Another user wishes that Tivo functionality can be integrated with AppleTV.
Granted, we are still at the beginning of the Digital Living Room Revolution. While AppleTV's product may not be the "It" product, if I were to handicap all the players in the Digital Living Room, I'd give Apple a good chance of having a good market share in the Digital Living Room. But not with the current AppleTV product.
Apple (AAPL)
Google (GOOG, owner of YouTube)
Nintendo (NTDOY)
Some complaints he makes include the low quality of videos. "it requires an HDTV, but the video you download is so low-res that it looks as fuzzy as plain old broadcast TV" -- Brent Schendler.
Another is that there is no way to order a movie directly from the iTunes store via your TV. You have to manually download it to your computer first.
On the positive side, YouTube and Apple made an agreement to broadcast YouTube through the Apple TV interface. Together with Apple's iTune monopoly which can be broadcast to the living room TV, Apple may have a chance to succeed with the concept of AppleTV.
But at this time, I don't think the product and technology is fully mature and widespread adoption may take some time. There's a user who says that he's been watching YouTube Videos on his Nintendo Wii for some time. There's another user on a bulletin board echo the complaints of the bad quality of the videos. Another user wishes that Tivo functionality can be integrated with AppleTV.
Granted, we are still at the beginning of the Digital Living Room Revolution. While AppleTV's product may not be the "It" product, if I were to handicap all the players in the Digital Living Room, I'd give Apple a good chance of having a good market share in the Digital Living Room. But not with the current AppleTV product.
Apple (AAPL)
Google (GOOG, owner of YouTube)
Nintendo (NTDOY)
Wednesday, May 30, 2007
YouTube will work with AppleTV; Tivo has a Profit
In Today's news in the Digital Living Room:
1. Apple Announces that YouTube videos can be seen using the Apple TV product
2. Tivo posts (1st ever?) quarterly profit.
Apple (AAPL)
Tivo (Tivo)
Google (GOOG, owner of YouTube)
1. Apple Announces that YouTube videos can be seen using the Apple TV product
2. Tivo posts (1st ever?) quarterly profit.
Apple (AAPL)
Tivo (Tivo)
Google (GOOG, owner of YouTube)
Monday, May 28, 2007
The Digital Living Room Revolution
In Cody Willard's Blog, he mentions that there is great "secular growth in the browser-based Internet-video cycle [as it] accelerates over the next few years. " While I agree with Cody Willard in this, I think this is only going to be part of a much larger scale Revolution: The Digital Living Room Revolution.
Viewing videos using traditional Internet Browsers (Internet Explorer, Firefox) is great. I can easily imagine a teenager sitting in front of their PC or workstation (or maybe in an Internet Cafe) going to YouTube and browsing videos and user generated content.
However, I think there are limits. I don't see grandparents regularly going to YouTube and browsing content. I don't see families sitting together enjoying YouTube. (Nielsen ratings says that there are more men than women who use YouTube, and those 12-17 years old are the key demographic.) Even if movies are streamed and viewed using an Internet Browser, I don't think many people would want to sit in front of their PC watching a 2 hour movie.
To reach a much wider audience, and to achieve a true widespread, paradigm shifting Revolution, the interface has to change. I believe the Revolution will be centered around the Digital Living Room.
I can imagine a future with the Digital Living Room (includes HDTV sets, a good sound system, and a very easy to use computer-like interface to the internet):
1. No longer will people be restricted to Cable Channels or Broadcast Television. Users or new companies can generate new content and videos and stream these directly to a family sitting on their couch watching their HDTV set. I can imagine a user using a simple remote interface (a modification of the Nintendo Wii's interface?) to change IP channels in the same way as a user today would change channels on a regular TV.
2. DVD players (even Blu-Ray or HD-DVD) becomes obsolete as video on demand gains wide acceptance. People can watch any program they want anytime they want without having to go to the video store.
3. Stores selling games for Game Consoles such as the Playstation PS3 becomes obsolete as gamers can download games directly to their system.
4. Instead of using the telephone, users can communicate with each other directly in high definition video calls.
5. Instead of having simple email, people can have video emails in High Definition.
6. The nature of retailing changes as people can evaluate and buy items with the aid of High Definition videos. Since the interface is easy to use and accessible to a wide audience, many more people would be able to buy items through the internet.
7. New developers could develop value added applications such as having a streaming ESPN sports ticker while watching their favorite sitcom on another channel.
These are just a few examples of the Digital Living Room. While there are some hints of this technology at this present time, there are many steps before this vision can take place.
In my next few posts, I intend to explore the current state of todays Digital Living Room and speculate what might happen in the future.
Viewing videos using traditional Internet Browsers (Internet Explorer, Firefox) is great. I can easily imagine a teenager sitting in front of their PC or workstation (or maybe in an Internet Cafe) going to YouTube and browsing videos and user generated content.
However, I think there are limits. I don't see grandparents regularly going to YouTube and browsing content. I don't see families sitting together enjoying YouTube. (Nielsen ratings says that there are more men than women who use YouTube, and those 12-17 years old are the key demographic.) Even if movies are streamed and viewed using an Internet Browser, I don't think many people would want to sit in front of their PC watching a 2 hour movie.
To reach a much wider audience, and to achieve a true widespread, paradigm shifting Revolution, the interface has to change. I believe the Revolution will be centered around the Digital Living Room.
I can imagine a future with the Digital Living Room (includes HDTV sets, a good sound system, and a very easy to use computer-like interface to the internet):
1. No longer will people be restricted to Cable Channels or Broadcast Television. Users or new companies can generate new content and videos and stream these directly to a family sitting on their couch watching their HDTV set. I can imagine a user using a simple remote interface (a modification of the Nintendo Wii's interface?) to change IP channels in the same way as a user today would change channels on a regular TV.
2. DVD players (even Blu-Ray or HD-DVD) becomes obsolete as video on demand gains wide acceptance. People can watch any program they want anytime they want without having to go to the video store.
3. Stores selling games for Game Consoles such as the Playstation PS3 becomes obsolete as gamers can download games directly to their system.
4. Instead of using the telephone, users can communicate with each other directly in high definition video calls.
5. Instead of having simple email, people can have video emails in High Definition.
6. The nature of retailing changes as people can evaluate and buy items with the aid of High Definition videos. Since the interface is easy to use and accessible to a wide audience, many more people would be able to buy items through the internet.
7. New developers could develop value added applications such as having a streaming ESPN sports ticker while watching their favorite sitcom on another channel.
These are just a few examples of the Digital Living Room. While there are some hints of this technology at this present time, there are many steps before this vision can take place.
In my next few posts, I intend to explore the current state of todays Digital Living Room and speculate what might happen in the future.
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