Bartle Doo Article Archives

By Sean Williams, The Motley Fool

This Is the Real Danger of the Irrational Exuberance Surrounding Bitcoins

April 13, 2013 Bartle Doo Leave a comment

Tom Coburn Official GOP senator would broaden gun checks

Filed under: Investing

If you’re anything of a long-term investor, someone who’s studied economics, or simply a fan of finance, you’ve probably looked on with disdain as the electronic currency known as Bitcoins has exploded from just $20 per fictitious token to a high of $266 in less than two months.

Source: Casascius, wikimedia.commons

The currency, if it can even be called that, was described in good detail by my colleague Alex Planes earlier this week. Its value is derived not from any sort of monetary backing — no government or monetary body recognizes a Bitcoin as an acceptable form of currency — but from the acceptance of other retailers and individuals who are willing to assign a monetary value to a Bitcoin and use that figure to exchange goods and services. Its value is also derived from its designed scarcity — there are only a fixed amount of bitcoins to go around.

As you might have assumed, as someone with a penchant for thinking long-term and having studied economics in college, I think there’s a clear and present danger investing in something that essentially doesn’t exist beyond cyberspace. However, the truly scary part of Bitcoins isn’t that they aren’t backed by a government entity, but is ingrained in the fact that it’s spawning a new generation of emotional and irrational investors who will get the completely wrong impression of how “investing” works.

History tends to repeat itself
You may have come across the phrase that history tends to repeat itself; I believe this is a perfect case in point to describe the trading action in Bitcoins over the past six months.

In 1999 you could throw a dart at the newspaper, purchase the stock your dart landed on, and probably have come out a winner. Earnings, cash flow, and valuation were all placed on the back burner as the emergence of the Internet as a commerce medium was putting all of those “archaic” investment tools back in the box. The technology-driven Nasdaq Composite would eventually cross 5,000, and both Cisco Systems and Microsoft would top $500 billion in market value. Near their peaks, Cisco traded for around 120 times earnings, while Microsoft was valued at a multiple of 55. It was truly a time of emotional and irrational investing, and Wall Street encouraged it just as much as speculative traders promoted it.

This week, I came across an article from the Silicon Valley Business Journal dated March 19, 2000, just nine days after the Nasdaq’s all-time record close. In that article, it’s stated that 37 investment banks at the time had “strong buy” or “buy” rating on Cisco without a single “sell” or even “hold” rating. Furthermore, George Kelly, a Wall Street analyst who was working for Morgan Stanley Dean Witter at the time and was a player in bringing Cisco public in 1990, was quoted as saying in his defense of Cisco’s enormous P/E multiple: “A

From: http://www.dailyfinance.com/2013/04/13/this-is-the-real-danger-of-the-irrational-exuberan/

By Dan Caplinger, The Motley Fool

Scared Consumers Are Sinking the Dow

April 12, 2013 Bartle Doo Leave a comment

Filed under: Investing

When consumers blink, investors get nervous. That’s the simple message from today’s early stock–market moves, as the latest reading on consumer sentiment fell to levels not seen for nine months. Moreover, with retail sales falling 0.4% last month and previous readings revised downward, consumers are clearly feeling a bit overextended in light of uncertainties regarding employment, government spending, and general economic growth. The impact on stocks was fairly muted, but it nevertheless pulled the Dow Jones Industrials off their record highs for a loss of 53 points, or 0.36%, by 10:55 a.m. EDT. The S&P 500 has suffered a larger decrease of 0.73%.

Somewhat surprisingly, though, that negative sentiment didn’t make its way into consumer and retail stocks. Hope improvement retailer Home Depot was the biggest gainer in the Dow early on, rising 1.6% and hitting another all-time high after getting an upgrade from analyst firm Jefferies. The environment for construction-related stocks has been so strong in light of the rebound in housing that former Home Depot division HD Supply filed for a $1 billion initial public offering, having gone private back in 2007. The enthusiasm suggests that investors aren’t convinced that weak consumer sentiment will persist for long.

On the other hand, the weakness continued in the technology sector. Cisco Systems has fallen almost 2% after posting sizable gains on each of the past three days. The company will face ongoing challenges in competing against a broader range of tech rivals, all of which are seeking to expand their customer offerings to meet the full range of IT needs, including Cisco’s core networking services. But arguably, the bigger concern is that overall tech spending might fall if the economy slows down markedly.

Beyond the Dow, Hudson City Bancorp has dropped more than 5% after the bank and its proposed acquirer, M&T Bank , said there would be a delay in completing their merger. M&T, which has slipped almost 4%, cited regulatory concerns from the Federal Reserve over its bank secrecy and anti-money-laundering programs. Despite the two banks’ plan to extend their agreement until the end of January 2014, they aren’t sure the merger will be complete even by then. Shareholders will still vote on the deal later this month, but the delay has to be disconcerting for investors on both sides.

Once a highflying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

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From: http://www.dailyfinance.com/2013/04/12/scared-consumers-are-sinking-the-dow/

By Asit Sharma, The Motley Fool

Ground Control to Amazon: "Seattle, We Have a Problem"

April 11, 2013 Bartle Doo Leave a comment

Filed under: Investing

Before reporting its fourth quarter earnings at the end of January, Amazon.com was valued at approximately 3,500 times trailing 12-month earnings. This is a fascinating statistic, the magnitude of which is difficult at first to grasp. Suppose that you took a profitable tech company like Cisco Systems, which makes $9 billion in profit from $47 billion in revenue, and represented its P/E ratio of 12 as an extremely tall building — say the height of the Great Pyramid of Giza in Egypt. Apples to apples, how much higher would Amazon’s building be? You would have to stack an equivalent of 290 Giza Pyramids, all the way into the stratosphere, to construct this tower, finally stopping at about 40 kilometers above the Earth, or just the right height to ask Felix Baumgartner to hand you a Red Bull from his Stratos space capsule. Even after Amazon’s earnings for the trailing 12 months turned negative, its stock has remained buoyant. Let’s examine why Amazon’s stratospheric valuation, so long untethered, may soon approach re-entry.

Elusive profits from “Other Services”
Over the last 10 years, Amazon’s total gross margin has remained within a fairly predictable band, ranging in most quarters between 20% and 26%. For years, investors have assumed that Amazon’s top-line growth will come from online retail sales, while its margins will rise on the shoulders of what Amazon terms “Other Services,” which includes Amazon Web Services, fulfillment, digital content, publishing, and advertising. You might think that, by now, the boost from other services, especially Amazon Web Services, or AWS, would have kicked in. AWS is the largest provider of public cloud computing services, and has been estimated to have grossed over $2 billion last year. Amazon does not break out results for AWS separately in its financials.

Some insights can be gained in reviewing how Amazon treats expenditures to build this business. Internal use software is amortized over two years, and the servers used for AWS are depreciated over three years. The short amortization and depreciation periods signal that the infrastructure for web services may be more capital intensive than one might assume. Generally accepted accounting principles, or GAAP, require that software and equipment are amortized and depreciated over management’s best estimate of their useful lives. Having to replace server infrastructure every few years signals a relatively high fixed cost.

Couple this fixed cost challenge with Amazon’s penchant for discounting to gain business, and you can see why AWS is not having more of an impact on the company’s net income. AWS tends to cut pricing for server time as it gains efficiencies, and has passed on 20 price cuts to clients over the last few years. This is helping AWS grow and fend off competition from the likes of Oracle, Google, and IBM. But it also helps explain why strategically, AWS may not be much different than Amazon’s media and electronics online retail business, which, incidentally, still comprises roughly 95% of Amazon’s total

From: http://www.dailyfinance.com/2013/04/11/ground-control-to-amazon-seattle-we-have-a-problem/

By Dan Caplinger, The Motley Fool

How the Dow's Tech Stocks Have Fared in 2013

April 11, 2013 Bartle Doo Leave a comment

Filed under: Investing

The reason why so many people follow the Dow Jones Industrial Average is that it spans nearly the entire breadth of the market. The Dow goes well beyond traditional industrial stocks: You can find everything from health care stocks to financials and energy companies.

Technology plays a big role in the Dow, and several of its most recent additions have come from that space. Yet investors have been nervous about many of these Dow tech giants, as smaller competitors have gotten a jump on them in lucrative high-growth areas. Let’s take a look at how the five tech companies in the Dow have fared so far in 2013 and what their prospects are for the rest of the year and beyond.

Dow tech stock total return price data by YCharts.

The common theme among all of these stocks is that they got their initial success from an area of the technology industry that is under threat from newer innovations. Therefore they have all had to make strategic shifts to seek out new ways to capitalize on their leadership positions.

Few stocks spark more heated debate than Hewlett-Packard , which has soared so far this year after plunging throughout 2012. Given the weakness in the company’s traditional core segment — PCs and associated peripherals — HP has had to move into the server market in an attempt to seek out higher-margin, cloud-computing-related services. Yet with many of the largest server users putting together their own server designs, it’s far from certain that HP can crack into the highly competitive market. And meanwhile, it will probably take longer than many investors would hope for HP to put its PC past behind it.

Similar reliance on the PC industry plagues Intel and Microsoft. Like HP, Intel has looked to its strength in the server chip market to bolster its flagging PC-processor business. But the real future is in mobile chips, and Intel has given competitors a big head-start in that area despite recent efforts to catch up, such as its planned Haswell chip slated for a June release. Microsoft has sought to move in nearly every direction to go beyond its PC-based software core, but it has encountered resistance at every turn, with its smartphone and tablet initiatives thus far showing mixed results at best.

Still, IBM has shown that such a transformation can be done. The former hardware giant has done a stellar job of moving into higher-margin server and IT services businesses. In particular, by focusing itself on the big-data needs of businesses seeking to mine voluminous amounts of information for business-enhancing knowledge, IBM managed to get an early jump on its similarly sized competitors and remain at the forefront of innovation in tech.

Increasingly, the Dow’s tech giants have found themselves encroaching on each other’s traditional niches in an attempt to broaden their reach. Like IBM, Cisco Systems has sought to

From: http://www.dailyfinance.com/2013/04/11/how-the-dows-tech-stocks-have-fared-in/

By Chuck Saletta, The Motley Fool

When Did High Tech Become High Yield?

April 10, 2013 Bartle Doo Leave a comment

Filed under: Investing

As the portfolio manager for the real-money Inflation-Protected Income Growth portfolio, Chuck Saletta is always on the lookout for companies with growing, well-covered dividends. In the brief video below, he discusses the amazing recent transformation that has turned high-growth, high-tech titans into stocks with higher-than-market yields.

To follow the iPIG portfolio as buy and sell decisions are made, watch Chuck’s article feed by clicking here. To join The Motley Fool’s free discussion board dedicated to the iPIG portfolio to see which of these high-tech titans did make the cut for that real-money portfolio, simply click here.

For more Foolish dividend picks
If you’re on the lookout for stocks that reliably pay you to own them, The Motley Fool has compiled a special free report outlining our nine top dependable dividend-paying stocks. It’s called “Secure Your Future With 9 Rock-Solid Dividend Stocks.” You can access your copy today at no cost! Just click here.

Company statistics mentioned in the video:

Company	Current Yield	Payout Ratio	Debt-to-Equity Ratio
S&P Depositary Receipts	2%	N/A	N/A
Apple	2.5%	12%	0.0
Microsoft	3.2%	45%	0.2
Cisco Systems	3.3%	25%	0.3
Intel	4.3%	21%	0.3

Source: Data from Yahoo! Finance, as of April 9, 2013.

The article When Did High Tech Become High Yield? originally appeared on Fool.com.

Chuck Saletta owns shares of Microsoft and Intel. The Motley Fool recommends Apple, Cisco Systems, and Intel. It owns shares of Apple, Intel, and Microsoft. 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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By John Divine, The Motley Fool

Why the Dow Jumped 128 Points Today

April 10, 2013 Bartle Doo Leave a comment

Filed under: Investing

Still gathering momentum in anticipation of corporate earnings, the markets rallied again today. Wall Street got some help from the Federal Reserve, which released the minutes of its latest meeting earlier than expected today. Bulls cheered the release, which suggested the central bank will only slow quantitative easing efforts when the job market improves markedly. Ending at an all-time record close, the Dow Jones Industrial Average added 128 points, or 0.88%, to finish at 14,802.

Health care was one of the strongest sectors today, and Merck shares didn’t disappoint, adding 2.9% to lead the Dow. A Jefferies analyst raised his price target on the shares to $48, citing his bullish view on pharmaceuticals, because of compelling valuation. The company also announced that the FDA will review Merck’s application to market an antifungal drug it’s trying to hawk in Europe as well.

It’s no surprise that the FDA also played a role in Pfizer‘s 2.8% climb today; drug manufacturers often live and die by the rulings of the regulator. Shares soared after the FDA labeled an experimental breast cancer treatment as a breakthrough medicine, meaning the agency will give priority review to the drug, speeding up the process it requires to get to market.

With tech stocks also flying high today, Cisco Systems advanced 2.4% Wednesday. Trading a little over 10 times forward earnings and paying a 3.3% dividend, Cisco shares offer compelling value in a Dow that’s risen 13% this year alone. The company’s new offerings with Microsoft to boost data-center productivity may also help send the stock higher if they catch on quickly.

But not everyone can be winners. Wal-Mart Stores , for instance, was one of only four decliners in the Dow, slipping 1% on PR-related negativity. The executive who called the retailer’s sales “a total disaster” in February, sparking investor fear, is leaving the company. A Facebook group of Wal-Mart critics, “Making Change,” derided the departure as “more of the same failure to address the real issues.”

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the low down on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

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By Business Wirevia The Motley Fool

Adobe Primetime Launches, Bringing TV Content to Connected Screens

April 10, 2013 Bartle Doo Leave a comment

Filed under: Investing

Adobe Primetime Launches, Bringing TV Content to Connected Screens

Comcast Cable and NBC Sports Group Sign On As Launch Partners

LAS VEGAS–(BUSINESS WIRE)– At the National Association of Broadcasters (NAB) conference, Adobe Systems Incorporated (NAS: ADBE) today announced the general availability of Adobe® Primetime (formerly “Project Primetime”), the industry’s most advanced TV publishing and monetization platform for programmers and pay TV service providers. The company also announced technology collaborations with dozens of industry leaders, including encoders, cloud platform providers, and content delivery networks (CDNs) to pave the way for TV content across every connected screen. Ecosystem partners include Akamai, Amazon Web Services, Cisco Systems, Elemental Technologies, Envivio, Harmonic, iStreamPlanet, RGB Networks, thePlatform and others. Comcast Cable and NBC Sports Group have signed on as first Adobe Primetime launch partners.

Adobe Primetime enables programmers and pay TV service providers to capitalize on the rising consumer interest in watching and engaging with digital video while helping protect and maximize the value of their content. The platform tightly integrates Adobe’s video publishing, player, DRM, advertising and analytics solutions to help eliminate the complexity of reaching audiences across screens and to create great digital video experiences while also offering new monetization opportunities for programmers and pay TV service providers. The seamless tie-in with ecosystem partners offers for the first time a highly scalable and reliable solution that can be implemented consistently across devices and platforms. Adobe Primetime‘s interoperable components can be deployed individually to fit their infrastructure needs or let the full solution handle the entire workflow.

Comcast Cable has incorporated several of Adobe Primetime‘s modular components across certain XFINITY Web properties to deliver and monetize IP-delivered video and give their subscribers access to their favorite content via these properties. Comcast is leveraging a broad range of Adobe Primetime capabilities, including the player, DRM, ad insertion, ad serving, and analytics – in various configurations. NBC Sports Group also launched with Adobe Primetime, and now uses the solution to offer live sporting events, including Major League Soccer (MLS) and National Hockey League (NHL) games, as well as Golf Channel content across devices. Consumers are able to watch the content live and on demand.

One Format, Every Screen

To help content owners and distributors more efficiently bring more content to more devices, Adobe Primetime provides a single publishing workflow with one video format (HLS) and one DRM …read more

By Evan Niu, CFA, The Motley Fool

Why VirnetX Shares Jumped

April 8, 2013 Bartle Doo Leave a comment

Filed under: Investing

Although we don’t believe in timing the market or panicking over market movements, we do like to keep an eye on big changes — just in case they’re material to our investing thesis.

What: Shares of VirnetX have jumped today by as much as 12% after the company announced that it has identified an additional developing specification related to its 3GPP LTE, SAE project.

So what: The company has submitted updates to its licensing declaration to the European Telecommunications Standards Institute as well as the Alliance for Telecommunications Industry Solutions to include the new specification. That brings its tally up to 18 specifications or developing specifications in its 3GPP LTE, SAE project where it hopes its patents and patent applications are or may become essential.

Now what: VirnetX will extend non-exclusive licenses to any company interested in implementing its IP, assuming its specifications are adopted as final standards. CEO Kendall Larsen said that the company believes its IP will be essential to the next generation of wireless networks. Shares got crushed last month after VirnetX lost a patent infringement suit to networking giant Cisco Systems, so today’s bounce shows that investors are optimistic that VirnetX can recover.

Interested in more info on VirnetX? Add it to your watchlist by clicking here.

It’s incredible to think just how much of our digital and technological lives are almost entirely shaped and molded by just a handful of companies. Find out “Who Will Win the War Between the 5 Biggest Tech Stocks?” in The Motley Fool’s latest free report, which details the knock-down, drag-out battle being waged by the five kings of tech. Click here to keep reading.

The article Why VirnetX Shares Jumped originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems. 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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Computers

Network heavy hitters to pool SDN efforts in OpenDaylight project

April 8, 2013 Bartle Doo Leave a comment

Software-defined networking, a set of technologies to help networks better adapt to user needs with less manual effort, may at last be getting the common foundation it has needed for interoperability and efficient development.

Most of the major vendors working on SDN have joined in on OpenDaylight, a project being announced on Monday that will develop an open-source SDN framework. The vendors, which include Cisco Systems, VMware, Juniper Networks and Ericsson, will contribute software and engineers to the effort, according to Jim Zemlin, executive director of the Linux Foundation, which is hosting the project.

With OpenDaylight, the networking industry will take the same approach to developing its next generation of technology as the big-data sector did with Hadoop or Web browsers with WebKit, Zemlin said. It will be a vendor-neutral group that no single member can dominate and in which “the best code can win,” he said. By pooling code and engineering effort to build core infrastructure software, vendors will free up their own research and development resources to build value-added products on top of it.

On an OpenDaylight conference call with media on Friday, Cisco committed itself to this model.

Source: FULL ARTICLE at PCWorld

By Dan Caplinger, The Motley Fool

5 Stocks That Have Doubled Their Dividends

April 7, 2013 Bartle Doo Leave a comment

Filed under: Investing

Dividends have given cash-starved investors the income they need as well as some security from the prospects of a downturn in the stock market. Those positive characteristics have attracted more investors than ever to stocks that regularly pay out dividends to their shareholders.

One of the most encouraging signs of a healthy stock market has been how many stocks have been able to increase their dividends substantially. In just the past year, several stocks have doubled their dividend payouts. Let’s take a look at some of them.

Mosaic : quarterly dividend up 400% in the past year
This fertilizer company has actually made two dividend increases in the past year, raising its quarterly dividend from $0.05 per share to $0.125 last May and then to $0.25 in July. Over the past several years, Mosaic has benefited from strong conditions in the farming industry generally, although more recently, challenges from more favorably priced nitrogen-based fertilizers has held back its growth somewhat. Yet with its dividend boosts over the past year, Mosaic has signaled that it sees a new upturn for its potash and phosphate fertilizer production, and shares have done better in response.

Cisco Systems : up 113%
Networking giant Cisco has also been a serial dividend raiser, with increases last October and just this month boosting its quarterly per-share payout from $0.08 to $0.17. Like many big tech stocks, Cisco has had its leadership challenged by competitors focusing on newer technologies, and the company has struggled to defend its turf and continue to grow. But with billions of dollars in free cash flow, Cisco has plenty of income from its core businesses to pay more to shareholders, and with its yield above 3%, Cisco now entices a new group of income-seeking investors to support its stock.

Southwest Airlines : up 100%
Southwest doubled its dividend last June, but dividend investors shouldn’t get too excited about it. The move only raised Southwest’s puny payout by half a penny, and the dividend yield on the stock is just 0.3%. Still, with other major airlines being too stingy to pay dividends at all, even Southwest’s token payout reveals its long history of stable profitability even in the face of massive bankruptcies and reorganizations elsewhere in the industry.

Reliance Steel & Aluminum : up 100%
The steel industry has been struggling lately, so it’s especially remarkable to see Reliance Steel having made not one but two dividend increases in the past year. With increases from $0.15 per share last May to $0.25 in August and then to $0.30 in March, Reliance is bucking the negative trends in steel. What’s especially noteworthy is that the company raised its payout even after announcing more than a $750 million deal to buy Metals USA in February — a move that might have led other companies to rein in its payouts.

Starwood Hotels & Resorts : up 150%
Unlike most companies, Starwood …read more

Dow Bounces Back After Poor Jobs Report

By Jeremy Bowman, The Motley Fool

Filed under: Investing

Well, it could have been worse. After lackluster employment reports on Wednesday and Thursday, the alarm bells sounded even louder this morning, when the Department of Labor reported that just 88,000 jobs were added in March. Still, the Dow Jones Industrial Average bounced back from an early 170-point loss to finish down just 41 points, or 0.3%, as many investors seemed to see the sell-off as a buying opportunity. It was the worst week of the year for the S&P 500 and Nasdaq, and for the Dow, its worst week since February, though it only fell 13 points.

The number of new jobs added was the lowest total since October, and comes after several months of strong job growth. In fact, the figures in January and February were revised upward by a total of 61,000, to 148,000 and 268,000. Economists are struggling to come up with an explanation for the sudden drop off, and have suggested that increases in the payroll tax and income taxes on the wealthy, as well as sequestration, have contributed to the weak labor market. Ninety-five thousand jobs were added in the private sector, while governments shed a net of 7,000 jobs, many of which were in the Postal Service. The unemployment rate dropped from 7.7%, to 7.6%, but the decrease was primarily the result of job seekers giving up on finding a job.

Cisco Systems was among the poorest performers on the Dow today, falling 2% after fellow network provider F5 Networks reported disappointing preliminary earnings, and fell 19% as a result. F5 missed its own revenue guidance by 7%, and also reported lower-than-expected earnings per share, while Radware, another industry peer, also reported poor preliminary results. For more information, see my colleague Evan Niu‘s coverage here.

American Express was the worst performer on the Dow, falling 2.1%, as the weak employment growth likely hurts the credit-card issuer more than most companies. The Jefferies Group also voiced some concerns about the lender heading into earnings season, and gave it a price target 10% below its current value. Total consumer borrowings jumped from $12.7 billion in January, to $18.1 billion to February, a trend that should favor the lender.

Meanwhile, Boeing bucked the overall trend, rising 1.4% after reporting a successful test flight of its troubled Dreamliner 787 jet, which had been grounded due to battery fires. The aircraft-maker now says testing has been completed, which leaves that 787 in the hands of regulators who originally ordered the composite jet grounded.

After a subpar week, investors can look forward to the beginning of earnings season, which could reverse the downward trend caused by poor employment numbers. Alcoa will be the first Dow stock to report earnings, releasing on Monday after hours. Analysts are expecting an EPS of $0.08 from the aluminum maker, which has been among the poorer performers on the blue chips so far this year.

<p class="MsoNormal" …read more

Dow Craters, Then Stages Comeback

By John Divine, The Motley Fool

Filed under: Investing

Down nearly 175 points in early trading, the Dow Jones Industrial Average sold off sharply on a disappointing employment report that showed continuing struggles in the job market. With earnings season kicking off next week, the blue chip index rallied later in the day, but still closed 40 points lower, ending with 0.3% losses, at 14,565. The first full week of trading in April saw all three major indexes fall after a red-hot start to the year.

Defying the broader trend, aerospace mainstay Boeing added 1.4% after completing its final test flight of the redesigned 787 Dreamliner battery system. Boeing has been scrambling to deal with systemic issues with its Dreamliner model since earlier this year, when a small fire broke out on a plane at the Boston terminal. The FAA still needs to stamp its approval on the reworked battery system, but today, investors saw at least some forward progress in that area.

Though there weren’t many positive catalysts for the stock today, McDonald‘s managed to end as one of the Dow’s top performers, tacking on 0.8% to close the week. Whether investors were attracted by its 3.1% dividend, or whether Wall Street simply thinks high unemployment makes for more fast food customers, remains to be seen, but the restaurant does have some serious issues to address. Just yesterday, New York City workers staged citywide protests at multiple fast food restaurants, demanding higher wages and the right to organize.

Hit especially hard by today’s labor market woes, credit-card provider American Express slipped 2.1%, to finish as the worst performer in the Dow. Although corporate profits remain at historically high levels, American Express relies heavily on continued consumer spending for growth, and the pressure will be on when the company reports quarterly profits April 17.

Finally, shares of Cisco Systems ended 2% lower today, though if there’s any solace to be had, it’s from the fact that shares primarily slipped on news of a competitor’s weakness. Cratering nearly 20% lower, shares of F5 Networks stumbled after announcing preliminary figures that (surprise!) weren’t that great. Cisco also agreed to acquire cellular communications company, Ubiquisys, for $310 million, which may have temporarily depressed shares.

Once a high-flying tech darling, Cisco is now on the radar of value-oriented dividend lovers. Get the lowdown on the routing juggernaut in The Motley Fool’s premium report. Click here now to get started.

var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ …read more

Boeing Soars Over a Falling Dow

By Travis Hoium, The Motley Fool

Filed under: Investing

Remember that slow and steady economic recovery we were having? It may have become even slower during March, because the jobs report released this morning was less than inspiring, and the markets are rethinking their recent bullishness. The economy added just 88,000 jobs, according to the Department of Labor. That’s the worst result since June, although unemployment did fall to 7.6% as people left the workforce. The Dow Jones Industrial Average has greeted the news by slumping 0.65% near the end of trading, while the broader S&P 500 dropped 0.79%.

Cisco Systems is one of the biggest losers on the Dow, falling 2.5% today. Competitor F5 Networks said its revenue and earnings would fall well short of guidance the company set back in January. This could mean some market-share gains for Cisco, but F5 CEO John McAdam said, “We believe the slowdown in orders is not caused by competitive losses,” so investors are seeing it as a red flag for the industry as a whole. Cisco won’t release fiscal third-quarter earnings until May 15, so it’s a long wait to see whether Cisco is feeling the same pressure as F5.

ExxonMobil is down 1.2% on a variety of news items. The price of crude oil is down 0.4% today to less than $93 per barrel. The U.S. Department of Energy said crude inventories hit their highest level since 1990, an indication of downward pressure on prices. On the positive side, Exxon’s deal to buy an 80% interest in Liberia’s Block 13 from Canadian Overseas Petroleum got final approval from the Liberian legislature and president. Africa is a growing source of reserves, and this will be an incremental positive for ExxonMobil.

One of the few stocks bucking the downtrend is Boeing , which has risen 1.3% today. This morning, U.S. Transportation Secretary Ray LaHood said the company had a “good plan” to fix a battery problem that have left the 787 Dreamliner grounded. Boeing is planning to run test flights today, so a return to the skies for the entire fleet could come shortly. That’s news investors have been waiting a long time for.

Boeing is a major player in a multitrillion-dollar market in which the opportunities are massive. However, emerging competitors and the company’s execution problems have investors wondering whether Boeing will live up to its shareholder responsibilities. In our premium research report on the company, two of The Motley Fool’s best industrial-sector minds have collaborated to provide investors with the must-know info on Boeing. They’ll be updating the report as key news hits, so don’t miss out — simply click here now to claim your copy today.

Cisco Systems Sinks in Sympathy

By Evan Niu, CFA, The Motley Fool

Filed under: Investing

Shares of networking giant Cisco Systems are particularly weak today, having lost as much as 5% today and lagging the broader market. The reason for the pessimism is that networking peer F5 Networks announced preliminary figures last night that left a lot to be desired and have negative implications for the broader sector.

F5 expects revenue in the first quarter to be $350.2 million, far below the range of $370 million to $380 million that it had previously forecast. Both GAAP and non-GAAP earnings per share came in below expectations.

CEO John McAdam said the weakness was attributed to revenue shortfalls in the North American market, while sales in Europe, the Middle East, and Asia — collectively known as EMEA — were somewhat disappointing, too. Business in Japan and the Asia-Pacific region were on target. Telecommunications buying was down along with U.S. federal sales, the latter of which is related to sequestration.

On the ensuing conference call, McAdam said a lot of the sales shortfalls were related to timing issues, downplaying fears that the market for its application-delivery controller, or ADC, is maturing. Mizuho Securities analyst Joanna Makris believes F5 is losing some of its pricing power due to intensifying competition.

Rival ADC vendor Radware also issued disappointing preliminary results this morning, with its own revenue projected at $45 million — also below its guidance. Radware said sales were strong in the U.S. market but cited weakness in EMEA and China for its weakness.

These two preliminary releases point to headwinds in the broader networking sector, and Cisco is just one of many networking companies under pressure today as investors digest the gloomy implications for the industry.

Last quarter, product sales were 78% of revenue, and the Americas geographical segment pitched in 59% to the top line. Any slowdown in IT spending, particularly related to the sequestration, will inevitably weigh on Cisco’s results.

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