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. Diller does dividends
IAC (NAS: IACI) is joining the dividend club.
Barry Diller's IAC -- a collection of websites that includes Ask.com, Citysearch, and Match.com -- is initiating a payout policy. Shareholders will now be receiving $0.12 a share every three months. It's a token amount. IAC will yield just 1.1%. However, it did give Diller the opportunity to call out the tech giants that are clinging to their greenbacks.
"I think it's an outdated and somewhat inane concept that high growth companies shouldn't pay dividends," he said, throwing down the gauntlet to some of tech's biggest names.
It's a smart thing to say, even on a tactical level. If Diller can get investors to call on larger Internet darlings to spend their money on dividends or buybacks instead of small acquisitions, it will make it that much easier for him to grow his own empire.
2. The missing Lynx
Investors weren't blown away by Sirius XM Radio's (NAS: SIRI) mixed quarterly report, but one of the welcome nuggets in the conference call was more details on the satellite radio giant's second Sirius XM 2.0 receiver -- Lynx.
Unlike the rather ho-hum receiver that rolled out last month, Lynx is an Android-powered plug-and-play unit with 200 hours of storage capacity and a touchscreen that can be updated through software upgrades for even snazzier features in the future.
With year-over-year revenue growth slowing to a 6% crawl and conversion rates heading lower, a dynamic retail receiver may be just the spark that Sirius XM needs to accelerate its growth rate and justify next year's planned price hike.
3. GameStop taps tablets
The video game retailer has been teasing a foray into tablets for months, but it's nice to see GameStop (NYS: GME) enter this market the right way.
Roughly 200 of its stores began stocking popular Android tablets, bundling them with a few high-end tablet games at no additional cost.
This is a much better route than rolling out a proprietary gaming tablet, the way its president had teased back in April. Bundling games while selling the tablets at regular retail prices will also help differentiate GameStop this holiday season for those in the market for a non-iPad tablet.
We can't ignore that gaming tablets taking off will be bad for GameStop. Folks don't need to deal with the small-box retailer when it's time to buy digital downloads, and there's no high-margin software resale business to speak of here. However, if tablets are taking over at the expense of handheld gaming systems it's better for GameStop to at least profit a little than watch enviously from the sidelines.
4. Qihoo's your daddy
Chinese dot-coms have become popular prey for bearish hunters, but it's always nice to see one or two fight back.
Let's be fair here: Citron is very good. It has nailed more than a few lucrative shorting opportunities in the past. However, it blew it by calling out Qihoo's Internet popularity claims by relying on a banner ad tracker (which Qihoo does not use) and a website that extrapolates the surfing habits of those downloading its toolbar plug-in to rank website popularity. Qihoo's flagship product is security software that helps users disable unnecessary toolbar plug-ins.
Qihoo's product is also a desktop app, so it's not as if website popularity is a fair measuring stick.
Citron's other knocks have merit, especially its valuation concerns. However, it's hard to overcome a partly flawed argument.
5. The prettiest house on the block
Residential real estate is an ugly place to be these days, but Zillow (NAS: Z) is making it work.
The sticky real estate website posted blowout quarterly results in only its second report as a public company. Revenue soared 132% -- during the same quarter that Realtor.com parent Move (NAS: MOVE) saw its top-line decline by nearly 8% -- and Zillow's adjusted profit was nearly double what analysts were expecting.
I've always been a fan of finding pretty stocks in ugly places, and Zillow definitely fits the bill.
If you want to see if these companies continue to do the smart thing, track them through My Watchlist.
- AddZillowto My Watchlist.
- AddSIRIUS XM Radioto My Watchlist.
- AddQihoo 360to My Watchlist.
- AddIAC/InterActiveto My Watchlist.
- AddGameStopto My Watchlist.
At the time this article was published The Motley Fool owns shares of GameStop.Motley Fool newsletter serviceshave recommended buying shares of Zillow and writing covered calls in GameStop. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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