Apple, IBM, Intel, and Microsoft to Report Profits. Pay Close Attention if Looking to Make Money in Technology Stocks.

The coming week is going to be very interesting for anyone interested in the stock markets tech. heavyweights. IBM, Intel, Microsoft, and Apple will be posting their results, which is sure to move markets and force investors to take another look at fundamentals like earnings, sales, and profit margins... at least for awhile, until we revert back to panic trading on the least bit of financial news coming out of Europe.
IBM is releasing its numbers first. On Monday, it will probably report expectantly dull, but healthy and sustainable revenue and earnings growth. This company has been doing everything right recently and analysts and investors alike will generally sing its praises. Investors like dependability and predictability, it helps them to sleep at night. IBM has achieved well on both counts. In the past eight quarters it has exceeded per share profit expectations by about 2.4%, nothing spectacular, but helps an investor know what he is buying. If IBM says it will make a certain amount of money, they can generally deliver.

Intel has been a little more difficult for investors. Performance wise, it has not been all bad. It has a steady and attractive dividend above 4%, almost unheard of in the tech arena, and it has largely avoided the collapse taking place in financials and many other areas of the market. The difficulty for Intel and its investors is the lackluster performance of PC sales, which are the bread and butter of Intel's chip business. This company needs more avenues of distribution, as PC's are being left in the dust by mobile and tablet sales as of late. Is this transition impossible for Intel, no! But they need to speed up the process.

According to Barron's Online, "consumer PCs have been steadily under-performing this year... tablet computers might be eating away at new purchases." And this is where our discussion of Microsoft kicks in. Microsoft has been increasing revenues at double digit paces, and profits are very healthy. Windows 7 was an effective operating system and sales were brisk. Coming online for Microsoft is Windows 7.5 for mobile devices and tablet computers, which should help give sales a kick as well.

Apple news, however, is most likely to be what excites investors when they report on Tuesday. Sales of the IPhone 4S are extraordinary, and the halo effect that their phones will continue to have on their computer business will be very positive. The more people that buy Apple phones and other gadgets, the more computers and media they continue to sell. This snowball effect for Apple has been going on for some time, and with the release of the IPhone 4S, and then the IPhone 5, it does not seem to be stopping.

Full Disclosure: My company or I own shares in Intel. (INTC).

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Microsoft Windows 7.5 Smartphones Could Sieze 20 Percent of Market by 2015. Microsoft to Provide Big Incentives to Retailers and Sales Staff in Coming Year.

Microsoft could control over 11 percent of the smartphone market by next year, according to some analysts, and 20 percent by 2015. In an attempt to reverse disappointing sales for its Windows 7.5 Phones, Microsoft is heavily targeting retailers, manufacturers, and mobile operators to increase interest in its models. Samsung, HTC Corp., and Nokia are expected to shift sales towards Microsoft Windows 7.5 in the near future.

With lots of cash on the balance sheet, and substantial amounts of free cash flow being generated on a monthly basis, Microsoft can afford to provide incentives and increase marketing efforts to boost sales. Much of the extra money being spent will probably go towards encouraging retail staff to push the phones on new and existing customers. Margins and profits on Apple phones are simply too high for Apple, and manufacturers and mobile operators are eagerly hoping to unlock their stranglehold on the market. Microsoft is providing an excellent opportunity for them to do so.

Nokia alone has more than 6,000 outlets, and it has already announced an exclusive deal with Microsoft for its smartphones after shelving plans for its own operating system. In the United States, many models are expected to cost less than $100, significantly less than phones provided by market leader Apple.

With the recent success of Windows 7, and an increased focus on tablets and smartphones at the company in the coming years, Microsoft shares are going to start looking very cheap. Currently selling from $25-$27, the stock is at similar levels to a decade ago. Investors who buy Microsoft are paid to wait by collecting a dividend of about 2.4%, and the downside risk at this point is very minimal.

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Maple seeks regulator OK for TSX bid - Business - CBC News

Maple seeks regulator OK for TSX bid - Business - CBC News:

The Canadian consortium of banks and insurance companies knows as "Maple Group" has finally submitted its proposal to acquire TMX Group (Canada's largest stock and options exchange owner) to four provincial regulators. Regulators will now begin seeking public comment on the $3.8 billion deal.

Provincial and federal competition bureaus are going to have to approve the deal because if it goes through there would be a virtual monopoly on stock and options trading in Canada. And though this deal is great for shareholders, it will be much more difficult to ascertain whether or not it is in the public's best interest. There is, however, a good chance of it getting the green light under Harper's conservatives.

The conservative government under Stephen Harper, though known to have blocked some deals, especially Potash, will look more favourably upon this deal as it is not a foreign takeover, which can often be a political fire-storm.

Maple's $50 per share offer for TMX is superior to the previous offer they received from the London Exchange, and a breath of fresh air for many shareholders during the current economic and financial turbulence. With current shares of TMX trading well below $50, there is still a lot of upside potential for this deal should it go through.

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Lowe's Losing Market Share to Home Depot. Intituting New Everyday Low Prices. Lowe's Dividends and Profits Should Increase.

Home renovation superstore Lowe's is hoping to revive its fledgling operations with a new everyday low price strategy. Second to Home-Depot, North Carolina based Lowe's has been struggling to compete with Home Depot in recent years as declining same store sales and promotions have trimmed profits. The stock is down 40% from its 2007 high, and is trading for the same prices you could buy it for 10 years ago.

Lowe's has 1,753 stores throughout North America, and hopes to keep adding more as it spreads in Canada and elsewhere.

According to Barron's:

Lowe's "bought back $2.4 billion of stock in the first six months of the fiscal year that ends in January 2012, an amount equal to about 8% of shares outstanding. Last year management set ambitious multi year financial targets, including $3.40 a share in earnings by 2015, sharply higher dividends and $3.6 billion of average annual share buybacks. The company could repurchase half its shares outstanding if buybacks run at the current annual rate, let alone the higher target."

By returning cash to shareholders in the form of dividends and share buybacks, Lowe's management is showing that it has its owners interests in mind. Far too often companies utilize precious shareholder cash to embark on costly acquisition sprees that yield little to no value for owners. When a company returns free cash flow to investors instead of squandering it, the Intelligent Investor should be pleased. To be sure, Lowe's could increase its dividend to 4% and still retain 50% of earnings in the company.

Lowe's is also closing under-performing stores and reducing the ranks of costly middle managers. Currently, Lowe's and Home Depot have a very nice duopoly in the United States, with Rona in Canada providing additional competition north of the border. As the housing market improves in the United States, margins and profits at Lowe's should improve and investors will be rewarded. As a relatively conservative and healthy investment in the American retail and home improvement sector, Lowe's is a solid fundamental choice for the Intelligent Investor.

Cheers and Happy Investing : )