For Immediate Release
Chicago, IL – August 15, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: SINA Corp. ( SINA), Baidu Inc. ( BIDU) Google Inc. ( GOOG) Sohu.Com Inc. ( SOHU) and Macy’s Inc. ( M).
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Here are highlights from Friday’s Analyst Blog:
Baidu Sheds Shuoba, Sina Surges
esterday, share prices of Chinese micro-blog “weibo provider SINA Corp. ( SINA) witnessed a surge of 7.0% ($6.82), following the announcement that Baidu Inc.’s ( BIDU) micro-blog platform “Shuoba was shutting down.
Baidu, which is the largest search engine in China, launched Shuoba in the latter half of 2010. Although the company did not provide any reason for the closure, analysts estimate Shuoba's stringent real name verification criterion was the primary reason behind the platform’s failure to capture significant market share in the highly competitive Chinese social-networking market, which in turn induced the company to discontinue the platform.
Chinais very sensitive regarding the Internet and imposes significant restrictions on online search and other social-networking activities. The Chinese government has already blocked Twitter, Google Inc.’s ( GOOG) YouTube and social-networking website FaceBook.
According to a latest report published by China Internet Network Information Center (:CNNIC), China’s social network market is shrinking, as the number of social network users decreased to 5.16 million in the first half of 2011. However, the micro-blog market soared 208.9% year over year and accumulated 195 million users (40.2% of the total Chinese Internet population) at the end of the first half of 2011.
Despite tough Internet regulations, SINA’s microblog has attained tremendous popularity with registered users totaling more than 140 million as of March, 2011. SINA expects to add more than 200 million users by the end of calendar year 2011. Therefore, the reduction of competition at this point is naturally a big positive for the company.
However, competition from other companies providing a similar service such as Tencent Holdings, and Sohu.Com Inc. ( SOHU) remains just as strong.
Following the closure of Baidu’s platform, Sina will gain further traction in the Chinese micro-blogging market based on its superior location-based services and instant messaging function, which directly challenges Tencent’s QQ, in our view.
Moreover, SINA has been aggressive in rolling out new features compared to other companies, which have made Weibo a full fledged social networking platform.
An imminent launch of an English version of Weibo by the end of 2011 for international users, shifting to a new domain (weibo.com), introduction of an English version of its iPhone App and the launch of virtual currency “Weibi are few of such initiatives.
SINA believes that micro-blogging will be one of the key factors in the development of mobile Internet and 3G in China, as more than 50% of users access the Weibo micro-blogging platform via mobile, with approximately 50 million messages being posted daily.
We believe the increasing popularity of weibo and its eventual international expansion will provide SINA a competitive edge.
We believe that SINA is well positioned to take advantage of the growing trends in the Chinese wireless services market, as it can attract more users to its wireless services than its competitors through its popular website and the weibo service.
However, weak non-advertising revenue growth is expected to hamper top-line growth going forward.
We maintain our Neutral recommendation on SINA over the long term (6-12 months). Currently, SINA has a Zacks #3 Rank, which implies a Hold rating in the short term.
Macy’s Retains Neutral Rec
Macy’s Inc.’s ( M) constant focus on price optimization, inventory management, merchandise planning and private label offering positions it to drive traffic, meet customer-oriented demand and improve in-store shopping experience.
We remain optimistic about the company’s customer-centric localization initiative called ‘My Macy’s.’ The program aims at improving comparable-store sales and reducing operating expenses, with stores and merchandise assortments focusing on local customer needs and preferences.
These help the company to deliver better-than-expected second-quarter 2011 results on the heels of healthy sales, improved operating margin and effective cost management. The quarterly earnings of 55 cents a share outperformed the Zacks Consensus Estimate of 47 cents, and jumped 57.1% from 35 cents earned in the prior-year quarter.
Macy’s now guided fiscal 2011 earnings in the range of $2.60 to $2.65 per share, up from $2.40 to $2.45 forecasted earlier.
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