Earlier today Amazon announced that AT&T (NYSE: T) will be the exclusive carrier for its new phone, which the e-commerce will reveal on Wednesday. Investors may remember what being the exclusive carrier for Apple's iPhone did for the company, and there's excitement over the prospect that this new phone could have similar benefits for AT&T's bottom line.
Unfortunately, according to Motley Fool analyst Eric Bleeker this new phone won't have nearly the same positive impact for AT&T. Eric believes that while cool features like a 3-D display with retina tracking built in sounds like a bit of a gimmick, but more importantly he points out that the market is saturated with smartphones. While the iPhone was something that had never been seen before, Amazon will be trying to sell a phone to people who probably already have a pretty good one.
So should investors be buying AT&T shares on today's news? On the Motley Fool's Stock of the Day, Eric says that the only people who should buy shares of AT&T are those who want a nice boring stock for their portfolio. The company is up only 15% in the last three years, but it does pay a dividend with a 5.3% yield. With a P/E of 10 AT&T looks like a pretty decent income investment, but Eric doesn't think it's going to pop because of Amazon's new phone.
Alibaba, the Chinese e-commerce giant, is set to IPO in August of this year. Investors may not know too much about the company besides its huge size, but Motley Fool analyst Simon Erickson can provide some insight. In today's Stock of the Day, Simon notes that Alibaba owns two sites: Taobao, which is a lot like eBay and includes plenty of smaller merchants, and Tmall, which has larger branded merchandise. According to Alibaba, Taobao did about $177 billion in transactional revenue last year, while Tmall did $70 million. For comparison's sake, Amazon made $100 billion last year altogether.
Clearly Alibaba is going to be an epic IPO, but investors need to dig deeper. For instance, it's important to note that Tmall's transaction revenue was up over 90% year over year, indicating that China's middle class will keep demanding popular branded merchandise. Meanwhile, mobile transaction revenue made up about 11% of the company's total revenue last year, but was up to 27% this year, indicating increased mobile usage. Both trends benefit Alibaba, but of course Alibaba hasn't hit the market just yet. So how can investors take advantage of this now?
Yahoo! owns about 22% of Alibaba, and the company will cash that in when Alibaba goes public, bringing big bucks to Yahoo!'s bank account. More importantly, Simon thinks that e-commerce is a winner-take-all industry, and with roughly $20 billion coming to Alibaba once it IPOs the company will be stronger than ever. While he wouldn't say that investors should jump in on day 1, they should absolutely be keeping a close eye on this company.
Keurig Green Mountain is up today after Coca-Cola announced it would increase its stake in the company. Is now the time for investors to jump in, or does the price pop mean they should hold off?
Shares of solar power company SolarCity (NASDAQ: SCTY) jumped big time yesterday after announcing that it would be acquiring Silevo, a solar-panel maker. With this acquisition SolarCity will be able to manufacture its solar panels rather than leasing them as it currently does, which could be very beneficial for its bottom line.
According to Motley Fool analyst Simon Erickson, SolarCity used to buy their solar panels overseas, ship them to the US, and then install them on rooftops here--a very expensive endeavor. This acquisition will allow SolarCity to cut out the middle man and increase the company's efficiency. And it doesn't hurt that SolarCity will be manufacturing those panels in Buffalo, NY, creating plenty of jobs there.
But is all that enough for investors to jump into SolarCity today? According to Simon, SolarCity is definitely a buy, and has been for a few months on the Motley Fool's Rulebreaker scorecard. The company hopes to reach 1 million customers by 2018, and the acquisition of Silevo brings SolarCity one step closer to reaching that goal.