Voting Gets Lazy; Cash-Craving Comcast; Broadcom Bites the Apple
Friday Four Play: The “Getting Lazy” Edition
Lazy. The entire country is lazy.
We have amazing freedoms in this country … freedoms that are the envy of the world: freedom of speech, freedom of the press, freedom of religion, the right to bear arms, et cetera. But the most important of all? The freedom (and the responsibility) to vote and choose our representatives to maintain and uphold these very freedoms.
Do we? Nah…
In the 2016 presidential election, voter turnout was a mere 55.7%. For the 2018 midterm elections, turnout was just 53.4%. In other words, roughly 160 million U.S. citizens didn’t vote in either election.
The excuses vary, but they go something like this:
- “I can’t be bothered, let someone else take care of that.”
- “It’s too much of a hassle. I can’t take off work.”
- “It doesn’t matter anyway. The government doesn’t work.”
When half of the voters in a country “of the people, by the people and for the people” don’t vote, do you really have to wonder why the government doesn’t work?
Anyway, you may soon be able to scratch “too much hassle” off the list of pathetic reasons not to vote. The greater Seattle area will become the first region to allow voting via smartphone.
Is that lazy enough for you? You can now vote while doing your business on the toilet, while you browse your email or look at cat videos and baby pictures on Face-stagram.
The smartphone voting plan encompasses more than 30 cities in the Seattle area, representing 1.2 million eligible voters. It’s also only being tested for a King Conservation District board of supervisors’ election — so nothing too major (yet).
On one hand, I applaud any efforts to get lazy constituents off their butts to vote. On the other hand, smartphone voting brings to mind a rather abhorrent mental image for me. I really don’t want a prime-time election TV show hosted by Ryan Seacrest telling me: “The voting lines are open!”
One final note: Privacy and security experts believe that smartphone voting puts our democracy at risk of being hacked. My response to this is that we already had that problem, and no one seems to care.
Besides, if we spent as much on securing our elections as the candidates do running for office, this wouldn’t be a problem anyway.
And now for something completely different, here’s your Friday Four Play:
No. 1: “Adjustments” Incoming
Yesterday, we discussed Comcast Corp.’s (Nasdaq: CMCSA) latest quarterly report. Great Stuff noted how the top-line numbers looked good, but the real devil was in the details. One of those details, in particular, was widely overlooked. Heck, the wording was so benign, I even missed it.
I’m correcting that today. The detail in question is this (emphasis mine): “With the rate adjustments that we are implementing in 2020 as well as the ongoing changes in consumer behavior, we expect higher video subscriber losses this year.”
That’s right! Rate adjustments, aka higher cable prices. Comcast is going to squeeze those few remaining pay-TV customers for all they’re worth, until they leave for streaming services too.
Now, Comcast hopes to make up the difference with a $10-per-month premium tier on its new Peacock streaming service. However, I wouldn’t be surprised if Comcast’s broadband customers also see a price hike eventually … if they haven’t already.
After all, the math just doesn’t work out for Comcast. Streaming and broadband customers just don’t bring in the same kind of revenue as high-margin pay-TV customers. Prices are going up, I guarantee it. Keep a close eye on Peacock (when it launches) and broadband subscriber numbers. These are your new metrics for measuring Comcast’s success.
No. 2: Don’t Forget About Intel
Nowadays, everybody wanna talk like they got something to sell. But nothing comes out when they move their lips, just a bunch of gibberish. And investors act like they forgot about Intel.
The original semiconductor OG not only reported blowout fourth-quarter earnings and revenue, but it also lifted guidance for the full year. Earnings topped expectations by $0.27 per share, and revenue was $1 billion higher than expected. Cloud computing was the main driver for the beat, rising 48% year over year. That’s some serious green.
As for guidance, Intel expects earnings of $5 per share on revenue of $73.5 billion, versus analysts’ expectations for $4.66 per share and $72.4 billion in sales.
But the real kicker for INTC investors was news that the company’s board approved a 5% dividend hike. That puts Intel’s dividend yield at a healthy 2%.
Competition may be heating up with AMD, but Intel’s been here before. Don’t count it out.
No. 3: Broadcom Gets Apple Juiced
Broadcom Inc. (Nasdaq: AVGO) has an answer to the question: “How do you like them Apples?”
That answer? “Very much, thank you!” This morning, the company announced that it signed a 3-year, $15 billion supply deal with Apple Inc. (Nasdaq: AAPL). The deal covers a wide range of high-performance radio frequency (RF) chips — i.e., the semiconductors that handle Wi-Fi, Bluetooth, 4G and 5G data connections.
The deal’s price tag alone is noteworthy, but Broadcom has some ulterior motives behind this Apple agreement. Currently, both Qorvo Inc. (Nasdaq: QRVO) and Skyworks Solutions Inc. (Nasdaq: SWKS) are interested in bidding for Broadcom’s RF business unit.
With a $15 billion Apple supply deal in its back pocket, Broadcom should now be able to command a premium price for its RF unit. Sorry Qorvo and Skyworks, the price just went up.
No. 4: What’s the Big Deal?
Seriously, I’d like to know. Shares of American Express Co. (NYSE: AXP) surged more than 4% on the open this morning, following the company’s quarterly earnings report. Yet, I don’t see anything anywhere near that spectacular in the numbers.
For instance, AmEx reported earnings of $2.03 per share on revenue of $11.37 billion. Earnings beat expectations by just $0.02 per share and were down 12.5% from year-ago results. Revenue was merely in line with Wall Street’s target.
Maybe it’s guidance that’s driving AXP? Nope. The company’s forecast was roughly in line with consensus targets … even a bit on the low side of analysts’ range.
My best guess is that today’s move was technical in nature — ’cause the earnings just don’t support it. AXP had been banging up against price resistance at $130 since the middle of January. Once the shares breached this psychological level (people like round numbers … they’re pretty and look good in spreadsheets) AXP jumped sharply.
I expect American Express to maintain some of today’s gains, but the shares are already coming back to earth. Look for a more controlled upside from here, now that the initial knee jerk is out of the way.
Great Stuff: When Life Gives You Coronaviruses…
OK, I’ve got to level with you. I can’t get the idea of infectious plague snakes out of my head. They’re seriously harshing my take on the market. The fact that the coronavirus death toll rose from 17 to 26 in just a day also kinda freaks me out. (Wait, coronavirus … corona … maybe I just need a beer?)
As a rational investor, I know that I need to cool my jets on this one and actually prepare for uncertain times. I also know my risk tolerance levels and my investment goals, but what about you, dear reader?
Only you know how risky or conservative you can allow your investments to remain — and how prepared (or unprepared) your portfolio is for volatile markets.
All right Mr. Great Stuff, that’s fine and all, but I don’t want to spend all day looking at charts and market data…
I would call you lazy here, but I think I’ve already covered that. While it’s not “voting with your smartphone” easy, the experts here at Banyan Hill make this process exceedingly simple.
Experts such as Ted Bauman spend all day (and a sizable chunk of evenings too) digging through the markets so you don’t have to. This week, Ted also has profit-taking on the brain (great minds think alike!), giving you three ways to know when to hold ’em and when to fold ’em.
In fact, you can get your “Gambler” fix right here: “The No. 1 Question: When to Sell Shares and Claim Profits.”
But if you have better things to do than wait for consolidation patterns … or watching for bullish breakouts … you may find it easier to have Ted handle the analysis for you!
Until next time, good trading!
Great Stuff Managing Editor, Banyan Hill Publishing