24/7 Wall St. » PAY

24/7 Wall St. Closing Bell (XOM, NKE, POT, TSLA, AMGN, RRC, AXE, ARMH, CE, LLY, HP, LLL, MHP, MAT, PFE, VLO, VRNG, RSH, PAY, REE, FFN)

Paul Ausick — Tue, 31 Jan 2012 21:06:33 +0000

All three major indexes opened higher this morning, but the strength didn’t last as the Chicago PMI number failed to meet expectations and came in lower even than last month’s reading. The lower reading on consumer confidence also supported sellers this morning. Nothing of note was concluded on the Greek debt swap, so that had little effect on the market one way or the other. Oil major Exxon Mobil Corp. (NYSE: XOM) reported earnings in-line with expectations, that wasn’t good enough for investors today (our coverage here). Crude oil is mixed today, with WTI crude down -0.32% at $98.46/barrel and Brent crude higher by 0.31% at $111.09/barrel. Gold closed today at $1,738.10/ounce, having gained 11% this month (our view here).

The unofficial closing bells put the DJIA down nearly 21 points to 12,632.91 (-0.16%), the NASDAQ rose nearly 2 points (0.07%) to 2,813.84, and the S&P 500 fell -0.05% or less than 1 point to 1,312.40.

There were several analyst upgrades and downgrades today, including Nike Inc. (NYSE: NKE) raised to ‘buy’ at Argus; Potash Corp. of Saskatchewan (NYSE: POT) cut to ‘neutral’ at Goldman Sachs; Tesla Motors Inc. (NASDAQ: TSLA) started as ‘buy’ at Jefferies; Amgen Inc. (NASDAQ: AMGN) reiterated as ‘buy’ and target price raised to $80 at Argus; and Range Resources Corp. (NYSE: RRC) raised to ‘hold’ from ‘sell’ with a target price of $59 at Canaccord Genuity.

Earnings reports since markets closed last night have led to some price changes as of the last half hour of trading today: Anixter Inc. (NYSE: AXE) is down -3.7% at $65.25; ARM Holdings PLC (NASDAQ: ARMH) is up 1.7% at $28.84; Celanese Corp. (NYSE: CE) is down -0.95% at $48.84; Eli Lilly & Co. (NYSE: LLY) is up 1.35% at $39.78; Exxon Mobil is down -1.98% at $83.80; Helmerich & Payne Inc. (NYSE: HP) is up 2.2% at $61.64; L-3 Communications Holdings Inc. (NYSE: LLL) is up 1.3% at $70.49; McGraw-Hill Cos. Inc. (NYSE: MHP) is down -0.5% at $46.09; Mattel Inc. (NYSE: MAT) is up 5.1% at $31.04 after posting a new 52-week high today of $31.49; Pfizer Inc. (NYSE: PFE) is down -0.8% at $21.42; and Valero Energy Corp. (NYSE: VLO) is down -0.73% at $24.10.

Other standouts from today include the following stocks:

Vringo Inc. (NASDAQ: VRNG) is up nearly 21% at $1.40. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

RadioShack Corp. (NYSE: RSH) is down nearly -30% at $7.19 after setting a new 52-week low of $7.15 earlier today. The social media software maker is apparently basking in the glow of the coming IPO of Facebook. See our coverage here.

Verifone Systems Inc. (NYSE: PAY) is up more than 8% at $42.61. The payment systems maker is getting a boost from a plan by Mastercard Inc. (NYSE: MA) to subsidize the installation of new card readers that use a microchip rather than a magnetic stripe to store customer information.

Rare Element Resources Ltd. (AMEX: REE) is up more than 17% at $7.22. The rare earth minerals miner is likely gaining after a ruling from the WTO that China’s restriction on rare earth minerals’ exports violates global trade rules.

FriendFinder Networks Inc. (NASDAQ: FFN) is up about 19% at $1.26. The adult social media company is likely also being bought up on the prospective Facebook IPO.

Stay tuned for Wednesday. Automakers will be releasing sales figures for January throughout the day. We have noted the following events on the schedule (all times Eastern):

7:00 a.m. – Mortgage Bankers Association purchase applications
7:30 a.m. – Challenger Job-cut data
8:15 a.m. – ADP employment report
10:00 a.m. – ISM manufacturing index
10:00 a.m. – Construction spending
10:30 a.m. – EIA weekly petroleum status report

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: AMGN, ARMH, AXE, CE, FFN, HP, LLL, LLY, MAT, MHP, NKE, PAY, PFE, POT, REE, RRC, RSH, TSLA, VLO, VRNG, XOM

Mid-Afternoon Movers (VRNG, RSH, CDTI, FFN, PAY)

Paul Ausick — Tue, 31 Jan 2012 19:34:52 +0000

At mid-afternoon, we’ve seen some changes among today’s big movers. On the plus side are Vringo Inc. (NASDAQ: VRNG), Clean Diesel Technologies Inc. (NASDAQ: CDTI), FriendFinders Network Inc. (NASDAQ: FFN), and Verifone Systems Inc. (NYSE: PAY). On the down side is RadioShack Corp. (NYSE: RSH).

Vringo remains the day’s biggest gainer, up more than 31% at $1.51. The social media software maker is apparently basking in the glow of the coming Facebook IPO. We have more coverage here.

RadioShack remains the day’s biggest loser, down nearly -30% at $7.17 after posting a new 52-week low of $7.15 earlier this morning. The electronics retailer pre-announced quarterly earnings this morning and the outlook for gross margins is killing the stock. Volume is about 18x the daily average. See more coverage here.

Clean Diesel Technologies is up nearly 22% at $3.55 in a 52-week range of $1.50-$11.20.

FriendFinder Networks is up more than 28%. The adult social media company is likely also being bought up on the prospective Facebook IPO.

Verifone is up more than 9% at $43.10. The payment systems maker is getting a boost from a plan by Mastercard Inc. (NYSE: MA) to subsidize the installation of new card readers that use a microchip rather than a magnetic stripe to store customer information.

The DJIA is off -0.20% at around 12, 628, the S&P 500 is down -0.04% at about 1,312, and the Nasdaq Composite is up 0.13% at about 2,816.

Paul Ausick

Filed under: 24/7 Wall St. Wire Tagged: CDTI, FFN, PAY, RSH, VRNG

Argus Making Many Model Portfolio Changes (AEP, WMB, MON, CSX, OXY, WY, PAY, MDU, ICE, HAIN)

Administrator — Thu, 12 Jan 2012 14:03:52 +0000

Argus has made quite a few changes to its model portfolio for 2012 after the first week of trading this year. The company has broken these out in equity income, growth and income, and mid-cap growth sector. We also have implied price entry and exit points as well.

In the firm’s equity income allocations, the firm is selling 100% of its allocation in American Electric Power Co. (NYSE: AEP) at $41.14 and is adding in Williams Companies Inc. (NYSE: WMB) at $28.22.

As far as growth and income, Argus is recommending to buy CSX Corp. (NYSE: CSX) at $23.32 and Monsanto Co. (NYSE: MON) at $79.00; and it is recommending that the model portfolio sell all of its positions in Occidental Petroleum Corp. (NYSE: OXY) at $97.17 and Weyerhaeuser Co. (NYSE: WY) at $19.18.

Finally, in mid-cap growth the firm’s model portfolio is buying VeriFone Systems Inc. (NYSE: PAY) at $37.12 and buying MDU Resources Group Inc. (NYSE: MDU) at $21.50. It is selling 100% of its position in IntercontinentalExchange Inc. (NYSE: ICE) at $113.13. Another selling stock, but only by 20% of its allocation is Hain Celestial Group Inc. (NASDAQ: HAIN).

Speaking of model portfolios, here were the 5 most undervalued DJIA stocks and the 5 least attractive DJIA stocks based upon consensus targets. Here are the top 4 DJIA stock picks from Jim Cramer for 2012.

Also, we made a lot of changes this year to the 24/7 Wall St. 2012 Model Dividend Portfolio.

JON C. OGG

Filed under: Analyst Calls, Research Tagged: AEP, CSX, HAIN, ICE, MDU, MON, OXY, PAY, WMB, WY

24/7 Wall St. Closing Bell (GMCR, LULU, NLY, M, HSY, CYAN, GSL, IVN, JCP, LOW, ZBB, DQ, BXG, PAY, SHZ, CADX, JKS)

Paul Ausick — Mon, 14 Nov 2011 21:05:08 +0000

Shares only briefly broke above last week’s close today, as decliners outnumber gainers by about 4 to 1 in the late afternoon. Tech stocks held up fairly well early as news of Warren Buffet’s buy of IBM stock probably boosted sentiment for tech shares. By early afternoon, though, even the tech-heavy NASDAQ by more than 20 points. Crude oil fell below $95/barrel before coming back to just over $98/barrel, about $1/barrel below the opening price. Gold is also down slightly and the euro is down against the dollar. Financials have lost the most today, about 2.45% an hour before closing.

The unofficial closing bells put the DJIA down more than 74 points to 12,079.29 (-0.61%), the NASDAQ fell more than 21 points (-0.80%) to 2,657.22, and the S&P 500 fell -0.94% or nearly 12 points to 1,251.88.

There were several analyst upgrades and downgrades today, including Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR) cut to ‘hold’ at Argus. Other changes included Lululemon Athletica Inc. (NASDAQ: LULU) reiterated ‘neutral’ with a $59 price target at Credit Suisse; Annaly Capital Management, Inc. (NYSE: NLY) started as ‘overweight’ at JPMorgan; Macy’s Inc. (NYSE: M) named ‘Bull of the Day’ at Zack’s; and Hershey Co. (NYSE: HSY) cut to ‘hold’ at Argus.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Cyanotech Corp. (NASDAQ: CYAN) is up more than 9% at $5.50; Global Ship Lease Inc. (NYSE: GSL) is down almost -17% at $1.75; Ivanhoe Mines Ltd. (NYSE: IVN) is up more than 2% at $21.03; J.C. Penney Co. (NYSE: JCP) is down almost -3% at $32.93; Lowe’s Companies Inc. (NYSE: LOW) is up more than 1.5%, at $23.49; and ZBB Energy Corp. (AMEX: ZBB) is down about -7.5%, at $0.71.

Several other standouts from today are as follows…

Daquo New Energy Corp. (NYSE: DQ) is down about -3%, at $2.73. The company makes wafers for solar PV cells and badly missed expected earnings. Net margins have fallen from 36.3% in the same period a year ago to 20.3%.

Bluegreen Corp. (NYSE: BXG) is up more than 44%, at $2.94. The resort time-share company has agreed to be acquired by BFC Financial Corp. (OTC: BFCF) for shares of BFC valued at $4.56.

Verifone Systems Inc. (NYSE: PAY) is up nearly 8%, at $44.03. Verifone has agreed to acquire a Norwegian company that is the largest provider of payment and gateway services in northern Europe. The price totals about $815 million, including debt.

China Shen Zhou Mining & Resources, Inc. (NYSE: SHZ) is up more than 18%, at $2.57. The company, which is China’s leading producer of fluorite, reported that it had nearly doubled revenues in the third quarter compared to the same period a year ago.

Cadence Pharmaceuticals, Inc. (NASDAQ: CADX) is down nearly -22%, at $3.97, after posting a new 52-week low of $3.95 earlier today. The company announced a $75 million secondary stock offering this morning.

JinkoSolar Holding Co. Ltd. (NYSE: JKS) is down more than -13%, at $6.75. The solar panel maker significantly reduced shipment and revenue forecasts for the third quarter.

Stay tuned for Tuesday. St. Louis Federal Reserve Bank president James Bullard and Chicago Fed president Charles Evans are giving speeches in the morning. Three other Fed presidents are also speaking tomorrow. Here’s a list of other noteworthy events (all times Eastern):

7:45 a.m. – ICSC-Goldman Sachs store sales report
8:30 a.m. – Producer price index released
8:30 a.m. – October retail sales
8:30 a.m. – Empire State manufacturing survey
10:00 a.m. – Business inventories

Paul Ausick

Filed under: Analyst Calls, HI/LOW, Market Close Tagged: BXG, CADX, CYAN, DQ, GMCR, GSL, HSY, IVN, JCP, JKS, LOW, LULU, M, NLY, PAY, SHZ, ZBB

24/7 Wall St. Closing Bell (K, ALU, TOL, PAY, YRCW, GRPN, TESO, BSFT, CCJ,CDE,KWK, NAT, FRPT, ADPI, TKLC, OVTI, DMND)

Paul Ausick — Mon, 07 Nov 2011 21:09:51 +0000

Markets opened up a bit this morning, but by 10:00 a.m. equities had turned back down, with the DJIA sliding down nearly -200 points before rallying back to its opening mark in the early afternoon. Shares simply couldn’t get any traction in any sector, with heath care stocks losing the least. Crude oil rose to just above $95/barrel, and the firing of two California state oil & gas officials by the governor has raised hopes for speedier permitting in that state, where an estimated trove of 15 billion barrels of shale oil is at stake. In the last half hour of trading, equities rebounded on their way to a gain for the day.

The unofficial closing bells put the DJIA up more than 85 points to 12,068.39 (0.71%), the NASDAQ rose more than 9 points (0.34%) to 2,695.25, and the S&P 500 rose 0.63% or nearly 8 points to 1,261.12.

There were several analyst upgrades and downgrades today, including Kellogg Co. (NYSE: K) cut to ‘market perform’ at William Blair. Other changes included Alcatel-Lucent SA cut to ‘sell’ at Citigroup; Toll Brothers, Inc. (NYSE: TOL) raised to ‘buy’ at Citigroup; VeriFone Systems Inc. (NYSE: PAY) started at ‘buy’ at Citigroupl; YRC Worldwide, Inc. (NASDAQ: YRCW) maintained at ‘underperform’ with a price target of $0.05 at Credit Suisse; and Groupon Inc. (NASDAQ: GRPN) started at ‘buy’ at Benchmark.

Here are today’s big post-earnings news reactions with prices during the last half-hour of trading: Tesco Corp. (NASDAQ: TESO) is down about -18%, at $13.34; BroadSoft, Inc. (NASDAQ: BSFT) is down less than -0.5%%, at $36.28; Cameco Corp. (NYSE: CCJ) is down nearly -7%, at $20.00; Coeur d’Alene Mines Corp. (NYSE: CDE) is up nearly 8%, at $29.42; Quicksilver Resources Inc. (NYSE: KWK) is down more than -9%, at $7.62; and Nordic American Tankers Ltd. (NYSE: NAT) is down nearly -4%, at $13.64.

Several other standouts from today are as follows…

Force Protection, Inc. (NASDAQ: FRPT) is up more than 30%, at $5.50. The armored truck maker is being acquired by General Dynamics Corp. (NYSE: GD for $5.52/share in a deal worth $360 million.

American Dental Partners, Inc. (NASDAQ: ADPI) is up nearly 79%, to $18.57. The company is being acquired by a private equity firm for $317 million, or $19/share, an 83% premium to Friday’s closing price.

Tekelec (NASDAQ: TKLC) is up more than 13%, at $11.20. The telecom equipment maker is being acquired by a private equity firm for about $760 million.

OmniVision Technologies, Inc. (NASDAQ: OVTI) is down nearly -18%, at $14.23. The company revised its outlook to include a sharp drop in fourth-quarter revenues. Shares are down about -50% since the beginning of the calendar year.

Diamond Foods, Inc. (NASDAQ: DMND) is down about -15.5%, at $39.21, after posting a new 52-week low of $38.45 earlier in the day. The company’s stock continues to get beaten up due to a delay in its acquisition of the Pringles business from Proctor & Gamble (NYSE: PG) and an investigation into payments to walnut growers.

Stay tuned for Tuesday. Philadelphia Federal Reserve president Charles Plosser is giving a speech in the morning and Minneapolis Federal Reserve president Narayana Kocherlakota gives a speech in the afternoon. We have noted the following events (all times Eastern):

7:45 a.m. – International Council of Shopping Centers-Goldman Sachs same-store sales
8:55 a.m. – Redbook weekly report on retail sales
1:00 p.m. – US Treasury 3-year note auction

Paul Ausick

Filed under: HI/LOW, Market Close Tagged: ADPI, ALU, BSFT, CCJ, CDE, DMND, FRPT, GRPN, K, KWK, NAT, OVTI, PAY, TESO, TKLC, TOL, YRCW

Top Analyst Upgrades & Downgrades (ALU, AIG, DK, GRPN, HD, ING, K, MDVN, PIR, DGX, TOL, VE, PAY, WES, YRCW)

Administrator — Mon, 07 Nov 2011 13:22:59 +0000

These are some of Monday’s top analyst upgrades, downgrades, and initiations seen from Wall Street research calls.

Alcatel-Lucent SA (NYSE: ALU) Cut to Sell at Citigroup; Cut estimates and target at Argus.
American International Group Inc. (NYSE: AIG) named as Bear of the Day at Zacks.
Delek US Holdings, Inc. (NYSE: DK) named value stock of the day at Zacks.
Groupon, Inc. (NASDAQ: GRPN) Started as Buy at Benchmark.
The Home Depot Inc. (NYSE: HD) Raised to Outperform at RBC.
ING Groep NV (NYSE: ING) Cut to Hold at Soc-Gen.
Kellogg Co. (NYSE: K) Cut to Market Perform at William Blair.
Medivation, Inc. (NASDAQ: MDVN) Raised to Outperform as Bull of the Day at Zacks.
Pier 1 Imports, Inc. (NYSE: PIR) Started as Outperform at Wells Fargo.
Quest Diagnostics Inc. (NYSE: DGX) Raised to Outperform at RBC.
Toll Brothers Inc. (NYSE: TOL) Raised to Buy at Citigroup.
Veolia Environnement S.A. (NYSE: VE) Cut to Underweight at JPMorgan.
VeriFone Systems, Inc (NYSE: PAY) Started as Buy at Citigroup.
Western Gas Partners. L.P. (NYSE: WES) Raised to Outperform at Credit Suisse.
YRC Worldwide. Inc. (NASDAQ: YRCW) Maintained Underperform and target cut to $0.05 at Credit Suisse; maintained neutral with losing share at Zacks.

See the top analyst upgrades and downgrades of the prior week here.

JON C. OGG

Filed under: Analyst Calls Tagged: AIG, ALU, DGX, DK, GRPN, HD, ING, K, MDVN, PAY, PIR, TOL, VE, WES, YRCW

Credit Cards, Partial Havens After J.P. Morgan Credit Comments (JPM, AXP, COF, V, MA, PAY)

Administrator — Thu, 13 Oct 2011 17:36:02 +0000

J.P. Morgan Chase & Co. (NYSE: JPM) is trading lower after its earnings report, but there were some bright spots inside an otherwise confusing earnings report. The most noticeable area was credit cards. This sector is very important as it helps Americans be the consumers that they love to be.

While high unemployment and lower confidence due to Europe and Asia have weighed on what investors expect out of credit cards, J.P. Morgan’s credit card metrics seem to be a boost for other credit card outfits. The highest credit quality bank showed that the loss rates in the credit card area was under 4.4%, down more than 3 and a half points from a year earlier and down almost a full point from the second quarter’s 5.3%. The delinquencies of 30 days or more fell to 2.64% versus 2.73% in the second quarter and from 4.1% a year earlier. The bank also noted higher spending of 10% from a year earlier and 2% from the second quarter.

American Express Co. (NYSE: AXP) is still down 1.3% at $46.40, but that is far better than the near-6% drop in J.P. Morgan shares today. Capital One Financial Corporation (NYSE: COF) is down almost 4% today at $41.73, something that is a bit of a surprise considering how deep it is into credit cards.

Visa Inc. (NYSE: V) and Mastercard Inc. (NYSE: MA) are both up on the day as the spending and credit metrics trends are looking solid. Visa shares are up 1.2% at $92.20 and Mastercard shares are up over 3% at $338.50. These two stocks are even higher after a price-fixing case was brought against them by an ATM trade group.

We would have assumed that payment solutions provider VeriFone Systems, Inc. (NYSE: PAY) would have been higher as well, but its shares are down just over 3% at $38.28.

JON C. OGG

Filed under: Banking, business and finance, Compensation, Consumer Goods, Financial Stocks, Retail Tagged: AXP, COF, JPM, MA, PAY, V

Top Analyst Upgrades & Downgrades (AAPL, CAT, CHTR, CL, CMCSA, CMA, DE, DTV, IFT, KMB, LRCX, MW, NVLS, NTRI, RL, TEVA, PAY, WCRX)

Administrator — Wed, 28 Sep 2011 12:17:59 +0000

These are some of this Wednesday’s top analyst upgrades, downgrades, and initiations seen having an impact from Wall Street research calls.

Apple Inc. (NASDAQ: AAPL) Started as Buy with $495 target at Janney.
Caterpillar Inc. (NYSE: CAT) Started as Overweight at Barclays.
Charter Communications Inc. (NASDAQ: CHTR) Started as Overweight at JPMorgan.
Colgate-Palmolive Co. (NYSE: CL) Cut to Hold at Citigroup.
Comcast Corporation (NASDAQ: CMCSA) Started as Overweight at JPMorgan.
Comerica Incorporated (NYSE: CMA) Raised to Market Perform at Wells Fargo.
Deere & Co. (NYSE: DE) Started as Overweight at Barclays.
DIRECTV (NASDAQ: DTV) Started as Overweight at JPMorgan.
Imperial Holdings, LLC (NYSE: IFT) Cut to Market Perform at FBR.
Kimberly-Clark Corporation (NYSE: KMB) Cut to Hold at Citigroup.
Lam Research Corporation (NASDAQ: LRCX) Started as Overweight at JPMorgan.
Men’s Wearhouse Inc. (NYSE: MW) named value stock of the day at Zacks.
Novellus Systems, Inc. (NASDAQ: NVLS) Started as Overweight at JPMorgan.
NutriSystem Inc. (NASDAQ: NTRI) Started as Buy at Auriga.
Polo Ralph Lauren Corp. (NYSE: RL) Cut to Hold at Citigroup.
Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) Started as Buy at Canaccord Genuity.
VeriFone Systems, Inc (NYSE: PAY) Started as Buy at Argus.
Warner Chilcott plc (NASDAQ: WCRX) Started as Buy at Canaccord Genuity.

JON C. OGG

Filed under: Analyst Calls Tagged: AAPL, CAT, CHTR, CL, CMA, CMCSA, DE, DTV, IFT, KMB, LRCX, MW, NTRI, NVLS, PAY, RL, TEVA, WCRX

American Express Is Going Shopping For Acquisitions (AXP, MA, V, EBAY, GOOG, AAPL, PAY)

Administrator — Thu, 15 Sep 2011 12:30:58 +0000

The number of ways consumers can spend their money is poised to get larger. The familiar credit and debit cards are threatened by all manner of electronic payment methods, and none of the big three card issuers wants to get left behind.

Juniper Research says that consumers will use their mobile phones to pay for $670 billion worth of goods and services by 2015. American Express Co. (NYSE: AXP), Visa Inc. (NYSE: V), and Mastercard Inc. (NYSE: MA) definitely want a big piece of that action. Their problem is that many of the biggest technology and internet companies are also staking out turf on the payment playing field. The stiffest competition comes from EBay Inc. (NASDAQ: EBAY) and its PayPal online payment system, but Google Inc. (NASDAQ: GOOG) is developing its own payments system, Apple Inc. (NASDAQ: AAPL) already operates the successful iTunes stores, and Verifone Systems, Inc. (NYSE: PAY) controls the lion’s share of the point-of-sale terminal space. The field is also crowded with new entrants like Square and other start-up payment companies.

American Express paid $660 million last year for a loyalty marketing firm with customers in Germany, Poland, and India, and the company executive charged with running Amex’s online and mobile business told Bloomberg that we “shouldn’t assume that’s the largest acquisition we can do.” He’s not lying about that — the company had $32 billion in cash sitting on its balance sheet at the end of June.

So where is Amex likely to look for acquisitions? China and India, with about 2.5 billion people between them, is the most obvious place. Credit cards and smartphones are being added quickly by consumers in these countries, and even Amex expects mobile phone transactions to surpass credit card sales within a few years.

Amex could obviously look for more loyalty-type marketing firms, and build on its already well-established brand. The company could also continue developing its own technology and continue making purchasing small companies that incrementally improve its online and mobile payment service.

Or it could do something big — like acquire Verifone. Verifone’s terminals are everywhere and the company’s growth in Europe and Asia has been on a hockey-stick trajectory. European sales grew 56% in the last quarter and sales in Asia grew by 42%. The company’s market cap is about $3.3 billion and American Express could easily afford to make Verifone shareholders an offer they couldn’t refuse. Like a 100% premium to the current Verifone share price, all in cash. That would be a game changer.

What are the chances of such a deal happening? Probably not very high right now, but as Amex discovers that it is going to have to fight a hundred different little battles against all the competition in mobile payments, the company may see the sense in making one big move. Acquiring Verifone would be out of character for Amex, but that may be just what the credit card giant needs.

Verifone’s 52-week share-price range is $27.15-$58.88, and the stock closed yesterday at $36.91. Amex’s 52-week range is $37.33-$53.80 and its stock closed yesterday at $48.99.

Paul Ausick

Filed under: Banking, Financial Stocks Tagged: AAPL, AXP, EBAY, GOOG, MA, PAY, V

Google Wants You to Pay with Your Phone (GOOG, PAY, AAPL)

Administrator — Wed, 16 Mar 2011 13:56:24 +0000

The next thing a smartphone will replace, if Google Inc. (NASDAQ: GOOG) has its way, is your credit/debit card. The Wall Street Journal reports that the maker of the Android smartphone operating system is working with Verifone Systems, Inc. (NYSE: PAY) to make the ubiquitous Verifone point-of-sale card readers talk to a smartphone with embedded near-field communication (NFC) technology. And once your credit card goes, your driver’s license could be next.

The technology is similar to RFID, the little tags and stickers that some merchants now put on merchandise to help keep up with inventory. An NFC-enabled Verifone reader would allow customers merely to touch their smartphones on the reader to pay for their purchases. NFC is one-way communication, so the reader wouldn’t be able to transfer anything to the phone.

The Nexus S Android-based phone from Samsung has NFC technology already built-in. A case of all dressed up with nowhere to go. Yet.

Paying for things is a good start, but won’t make any money for Google. As usual, Google has bigger ideas. The NFC technology can be embedded in just about anything for a very few cents. Google has already distributed posters with NFC that merchants can post in the store windows and that will allow passers-by to touch the poster with an NFC-enabled phone and get more info about the store or maybe even a coupon to spend right now.

For Google, NFC allows the company to target ads to users based on their location and the kinds of things they have purchased before. As with virtually everything Google does, this is all about advertising and creating a new platform to serve up ads to a specific user at a specific time and place. This is a very powerful idea, and by tying up with Verifone, Google gets huge visibility in the retail sector.

It doesn’t take a lot of imagination to see NFC technology being used for all kinds of things, up to and including drivers’ licenses and passports. Those days are still a fair ways off, but they’re on the horizon.

And what about Apple Inc. (NASDAQ: AAPL) and its iPhone? According to the International Business Times, the company fears that the lack of industry standards in NFC technology will cripple the service. Apple has apparently decided not to include NFC technology in its next iPhone.

Instead, Apple is apparently working on a mobile payment system that would funnel charges through its iTunes store. It’s the typical Apple model: provide a well-designed and comprehensive service and take a cut of the action. It’s been a pretty good model for the company over the past 10 years.

The threat to Apple here is the ubiquity of the NFC technology. There’s no way to keep anyone out, so phones running virtually any mobile operating system will work. If every other mobile phone in the world supports NFC, Apple’s payment system will have to be worlds better than NFC in order to attract customers. Try to imagine a way that Apple could make a more functional credit card. Pretty hard to do, right?

It’s always been a mistake to count out the folks in Cupertino just because the rest of us can’t see the point of what they’re doing. Maybe that will be the case this time too. Anything’s possible.

Paul Ausick

Filed under: Consumer Electronics, Consumer Goods, Internet Tagged: AAPL, GOOG, PAY