For Immediate Release
Chicago, IL – August 2, 2012 – 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 Apple Inc. (AAPL), AuthenTec Inc. (:AUTH), Google (GOOG), Microsoft (MSFT) and Research In Motion (RIMM).
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513
Here are highlights from Wednesday’s Analyst Blog:
Apple Set to Buy AuthenTec
Apple Inc. (AAPL) recently announced its intention to acquire Melbourne, Florida-based mobile and network security provider AuthenTec Inc. (:AUTH) for approximately $356.0 million in cash. According to the 8K filing, Apple is paying $8 per share, a 58% premium over Authentec’s closing price of $5.07 on July 26, 2012.
Under the terms of the agreement, Apple will pay another $20.0 million to acquire certain non-exclusive licenses of AuthenTec. The iPhone maker also has the option to pay around $115.0 million for certain patent licenses within the next nine months. In addition to these, Apple will pay $7.5 million to develop a 2D fingerprint sensor compatible with its products going forward.
AuthenTec develops fingerprint and area sensors, software for identity management and e-commerce solutions, and embedded security solutions for network and mobile security systems. The company has a long list of clients. AuthenTec earned $69.8 million in fiscal 2011.
We believe that the acquisition is consistent with Apple’s strategy of acquiring small start-ups, which have historically been essential to its business growth. The acquisition will help Apple to offer a more secure mobile commerce platform built on near-field communication (“NFC”) technology. AuthenTec recently introduced its first smart sensor for the NFC mobile commerce market.
We believe that the acquisition will provide Apple a significant competitive edge over Google’s (GOOG) Android and Microsoft’s (MSFT) Windows Mobile operating systems, which have been susceptible to security threats owing to the weaknesses in NFC technology. Moreover, the improved security features will also help iPhone to take enterprise market share particularly from Research In Motion’s (RIMM) BlackBerry smartphone.
Following the news of the takeover, AuthenTec shares jumped 66% to close at $8.42 on July 27, fueling expectations for a higher bid, particularly from Samsung, which recently entered into an agreement with AuthenTec to use its VPN technology for its devices.
We believe that a hostile bid from Samsung is possible given the fact that the Korean handset maker is focused on enhancing the security features of its product lines in order to maintain its lead over Apple.
According to IDC, Samsung maintained its #1 position in the smartphone market in the second quarter of 2012. The company shipped 50.2 million smartphones in the quarter compared to Apple’s 26.0 million. Moreover, the companies are fighting each other in court over design and software patents. We believe that a bid for AuthenTec will further increase hostility between the two companies going forward.
Apple has been a leader in the technology space and has always wooed its investors with its innovative product line. However, stiff competition, the overcrowding in its major markets and increasing legal complexities are the main concerns going forward.
Currently, Apple has a Zacks #3 Rank, which implies a Hold rating over the short term.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339
More From Zacks.com
- Financial Technical Analysis
- Research In Motion