This Week's 5 Smartest Stock Moves
If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. The pros know
LinkedIn continues to defy gravity.
The social networking website for corporate climbers saw its revenue soar 81% to $303.6 million in its latest quarter. Adjusted earnings more than tripled to $40.2 million or $0.35 a share.
Analysts were only modeling a profit of $0.19 a share on $279.5 in revenue, but what else is new? LinkedIn has managed to blow past Wall Street profit targets every single quarter since going public two years ago at $45.
LinkedIn has now topped 200 million members, and nearly two-thirds of its new users are international users.
2. Chasing satellites
Sirius XM Radio knows how to serve up hits -- and not just on its commercial-free music channels.
The satellite radio provider checked in with encouraging results this week.
Revenue climbed 14% to $892.4 million, as Sirius XM closed out the year with 2 million more accounts than it had when 2012 began. Profitability more than doubled, once again flexing the scalable nature of this model that is high on fixed costs but low on the variable expenses.
The report wasn't perfect. Average revenue per user staged a surprising sequential dip. However, the real gem in the report is that monthly churn actually fell to 1.8%. Sirius XM has been investing in its retention efforts, and it's clearly paying off. Despite last year's 12% rate increase on core rates and the wider adoption of free ad-supported streaming smartphone apps that integrate with a growing number of new cars, Sirius XM is still as sticky as ever.
With 23.9 million accounts, Sirius XM has also never been more popular.
3. Disney whirls
The House of Mouse is holding up just fine.
Disney posted better-than-expected quarterly results this week. Outside of the family entertainment giant's studio entertainment division, Disney's four other divisions posted year-over-year gains in revenue and operating income.
However, Disney's real reason for making the cut here is CEO Robert Iger confirming on CNBC what sources have been speculating for months. It's not just the next three Star Wars movies that will begin screening in 2015 that Disney is working on since acquiring Lucasfilm last year. Iger revealed that Disney also has creative teams working on stand-alone movies for some of the franchise's more memorable characters.
Boba Fett? A young Han Solo offshoot? Jar Jar Binks?
Okay, maybe Jar Jar Binks would be a bad idea.
Disney's ability to milk the rich character portfolios of its acquisitions is a work of art.
4. Apple puts its money where Einhorn's mouth is
The week began encouragingly enough for Apple . The world's leading consumer tech company announced that it has served up 25 billion song downloads since iTunes debuted 10 years ago. It's an impressive feat since Apple was only at 16 billion in late 2011 when it provided its last update on that particular metric.
However, the week closed on fireworks after billionaire hedge fund manager David Einhorn moved to block an Apple proposal that would make it harder for the company to issue preferred shares. Einhorn believes that the sum of Apple's parts is greater than the market is presently allowing, and he feels that returning money to shareholders or potentially putting out a ton of high-yielding preferred shares will help increase shareholder value.
Einhorn's tactics may be debatable, but it did get Apple to open up on Thursday night.
Apple issued a press release reiterating its plans to return $45 billion to shareholders through the next three years. It also pointed out that it will have accomplished $10 billion of that once its next quarterly dividend becomes payable on Valentine's Day next week.
Einhorn is right about Apple being able to dig even deeper than it's currently doing. Even if the majority of its $137 billion in cash and marketable securities is tied up overseas, Apple's stock has corrected sharply since peaking last year above $700. If growth investors are concerned about the margin-crunching nature of Apple's near-term future, it's time to start wooing income investors to take their place.
5. Please follow me to your table
OpenTable had better save room for dessert.
The online dining reservations leader continues to grow, posting another quarter of better-than-expected growth on Thursday night. The stock didn't pop higher since its guidance for the current quarter and all of 2013 came in a bit light, but let's go back to the more important metrics of the concept's popularity.
OpenTable's flagship North American business closed out the quarter with 19,801 eateries in its system, and that's a slight sequential uptick and a healthy 15% increase over the past year. OpenTable also seated 29.9 million diners during the quarter, 21% ahead of the foodies it helped feed a year earlier.
Critics love to argue that OpenTable is too expensive for restaurants, and that operators will eventually cut ties with the platform. Well, seeing the number of diners growing faster than the number of restaurants implies that the average restaurant is landing more diners through OpenTable.
Why mess with the menu that's working?
One more smart move
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The article This Week's 5 Smartest Stock Moves originally appeared on Fool.com.Longtime Fool contributor Rick Aristotle Munarriz owns shares of Walt Disney. The Motley Fool recommends Apple, LinkedIn, OpenTable, and Walt Disney. The Motley Fool owns shares of Apple, LinkedIn, and Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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