Tag Archives: ANGI

Business, Finance, Occupation & Industry

An Angie's List for Debt Ratings?

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By 24/7 Wall St.

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The difference between professional services reviews posted to Angie’s List Inc. (NASDAQ: ANGI) and book reviews posted at Amazon.com Inc. (NASDAQ: AMZN) or the number of video views counted at Google Inc.’s (NASDAQ: GOOG) YouTube is that Angie’s List takes pains to verify that its reviews are not being padded by self-promoters. It’s an Internet version of a model long practiced by Consumer Reports — independent reviews by the person who pays the bill.

Now, consider how that might apply to the ratings agencies like Moody’s Corp. (NYSE: MCO) or The McGraw-Hill Companies’ (NYSE: MHP) Standard & Poor’s or Fitch Ratings. Under their current modus operandi the agencies are paid by the bond issuers for ratings. We all know how that worked out, and S&P now faces a federal investigation related to its ratings of mortgage-backed securities prior to the real estate meltdown of 2007.

The logical thing would be for the ratings users to pay for those bond ratings, but the trick would be how to control the way the data gets disseminated. After all, if a brokerage pays for something, it would want to own it. And the bond brokers wouldn’t want to be saddled with bad ratings either because they couldn’t sell dicey bonds to savvy investors. Corporate bond issuers would hate this too.

How about having the federal government pay? Certainly the cost wouldn’t be nearly as high as the cost of propping up and bailing out the financial system. But, realistically, the philosophical and political issues with having the government pay for bond ratings has virtually no chance of gaining any traction.

The ratings system we’ve got — including the threat of federal prosecution — might be the best we can get. But do you really think Moody’s or S&P or Fitch is as trustworthy as Angie’s List? Really?

Filed under: 24/7 Wall St. Wire, Bonds, business and finance, Internet Tagged: AMZN, ANGI, GOOG, MCO, MHP

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

BofA/ML Analyst Upgrades Zynga as Uncommon Value

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By 24/7 Wall St.

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zynga-logoZynga Inc. (NASDAQ: ZNGA) is no longer a very loved company. The social game maker has lost its favorable outlook largely as it and Facebook Inc. (NASDAQ: FB) try to distance themselves from each other. So when you see an analyst upgrading the stock, it may raise some eyebrows.

Bank of America/Merrill Lynch raised its rating to Buy from Neutral, citing Zynga’s asset value and mobile stabilization. Its price target was raised to $3.40 from $2.70.

The firm does caution:

While our upgrade could be early with bookings expected to decline quarter over quarter in the first quarter, and our below-Street 2013 estimates, we are upgrading Zynga to Buy due to the following: 1) valuation now reflects downside risk to bookings with $2.20/share in cash over assets, a $200 million per year poker business, and $150 to $200 million mobile business likely supporting the stock; 2) ZNGA‘s mobile trends may have stabilized (per comScore user data), and for PC there is option value for an inflection in players in 2013 driven by new categories (gambling and core); 3) recent 60-day performance of ANGI, FB, GRPN, and P suggest investors’ risk tolerance with developing business models has increased; and, 4) FB‘s 10-K disclosure suggests $15 to $25 million upside to fourth quarter guidance and our prior bookings estimate.

BofA also noted that social gaming trends remain weak and bookings may not bottom in 2013.

While BofA has raised its fourth-quarter estimates, the firm is still below Wall St.’s consensus in 2013. The firm is raising its 2013 total bookings estimate to $895 million from $825 million, EBITDA to $20 million from -$45 million, and adjusted “LPS” to $0.09 from $0.15. Its revenue projection for 2013 is $980 million, versus $1.06 billion.

Filed under: 24/7 Wall St. Wire, Analyst Calls, Internet, Media, Value Investing, Video Games Tagged: FB, ZNGA

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Source: FULL ARTICLE at DailyFinance