EmergingGrowth.com Report on Pandora and Apple, Play the Necessities, and Profit in Print..
EmergingGrowth.com Report on Pandora and Apple, Play the Necessities, and Profit in Print..

EmergingGrowth.com, a leading digital financial media company, Reports on a possible transaction between Apple Computers (NASDAQ: AAPL) and Pandora Media (NYSE: P)Also discussed, Play the Necessities Nash Finch Company (NASDAQ: NAFC) and Core-Mark Holdings (NASDAQ: CORE), and Profit in Print Lexmark International (NYSE: LXK) and Electronics for Imaging (NASDAQ: EFII).

 

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Pandora Media (NYSE: P) has seen strong gains this month, rallying more than 20% from the lows seen on Nov. 16th, as investors assess the latest survey news from comScore Media Metrix which shows that the company’s product offerings have unexpectedly surpassed many of its competitors amongst multimedia consumers.

 

Investors are optimistic on Pandora leading to additional speculation that Apple Inc (NASDAQ: AAPL). might consider purchasing a substantial portion of the company.  This as well as the recent congressional testimony on music licensing from company CEO Joe Kennedy, have kept Pandora in the headlines and these factors point to strong potential upside for the stock into the end of the year.

 

Since Congress is widely expected to favor the rights of musicians, legislation is will probably address the terrestrial radio imbalances in distribution rights.  If rates for internet radio distributors are lowered, companies like Pandora will see significant advantages and make the company more attractive to potential buyers.  So, it can be said that the most critical factor for continued upside in Pandora would be seen if Apple decides to take a stake in the company.

 

Given the confluence of positive factors, some analysts have suggested that Apple could buy a stake in Pandora that is as large as 15% in early 2013.  If this is the case, it would indicate that Apple itself plans to launch a similar service, and if these expectations come to be, the November rallies in Pandora could be just an early sign of what is to come.  Currently, Pandora is trading nearly 60% below its all time highs ($20), so there is clearly upside potential before the market starts to view the company as being overvalued.

 

Play the Necessities

 

It’s been over 4-years since the height of the real estate/credit crisis and folks are still weary of the markets. Many on Wall Street and Main Street believe that the equity values have been artificially propped up by central banks around the world, and that stimulus measures despite having a near-term positive effect, will ultimately hurt us in the future. That said, many funds that shy away from volatility and rely on slow growth invest in the food industry. Two companies that have been around for over 100-years and provide unwavering stability include Nash Finch and Core-Mark. 

Nash Finch Company (NASDAQ: NAFC), based in Minnesota and founded in 1885, is a wholesale food distributor in the United States. The company has consistently shown an increase in net income, revenue growth and good cash flow from operations. The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food & Staples Retailing industry. Net income increased by 44.7% when compared to the same quarter one year prior, from $10.09 million to $14.60 million. Growth in the company’s revenue appears to have helped boost the earnings per share.

One shortfall that has many investors spooked is that the company’s return on equity trails that of both the industry average and the S&P 500. Shares are way oversold and are down over 30% year-to-date.  The company has a market capitalization of $259 million with its stock trading at $21.10, slightly higher than its 52-week low of $18.72 and well-below its high of $30.55. Cantor Fitzgerald has a buy on the company and with price target of $34, and Nash was recently upgraded by TheStreet from sell to hold.

Core-Mark Holding (NASDAQ: CORE), based in San Francisco and founded in 1888, provides various products, including cigarettes, candy, snacks, fast food, groceries, dairy, bread, beverages, health and beauty care products. The company recently came in with earnings that were slightly below for the quarter ended. One miss does not mean the company is going downhill. On the contrary, it usually provides an entry point that is worthy of consideration.  

The company is trading just below $46 dollars a share, with a 52-week low of $34.78 and a high of $50.56. The company has a market capitalization of $527 million and pays a dividend yield of 1.65%. Since early 2009 the company has shown a long-term upward trend in its chart, constantly making new highs. Any pullback in CORE could be bought, as its primary business is strong in the sector.

Profit in Print

Compliance and regulations introduced since the crash have required many firms to increase their paperwork and documentation. Printing products and services are considered to be by many companies as the cost of doing business.

Demand in this sector is not expected to drop any further than it has in 2012, mainly due to the fiscal cliff and the uncertainty that lies ahead. Many companies have curbed spending capital due to the lack of clarity, but will certainly pick up next year. Demand is this sector will only pick up in 2013 and investors need to be positioned in companies that will benefit from a strong upturn in the first half of next year.

Lexmark International (NYSE: LXK) is a supplier of printing, imaging, document workflow, and content management solutions. With a yield of 4.90% the stock offers gains while waiting. The company is well-known for their printers and related accessories. The stock trades just above $24.00, off its 52-week low of $16.20 and well below its 52-high of $38.34.

This past week Lexmark announced a new secure content monitor, which automatically tracks and audits sensitive information. It is expected to bring in extra revenue as it protects companies from potential threats to confidential information. IT security systems are in high demand as companies are being hacked now more than ever in the past. The new product is expected to save many companies capital due to compliance issues and industry standards that are requiring better security.

Electronics for Imaging (NASDAQ: EFII) is a provider of color digital print controllers, digital inkjet printers, and business process automation solutions. Last month the company reported better than expected earnings, as net income rose to $13.4 million (28 cents per share) vs. $6.1 million (13 cents per share). This is a more than twofold rise from the year-earlier quarter, as EFII beat the mean analyst estimate of 22 cents per share.

The company has a market capitalization of $855 million with revenue rising in the past four quarters. For three consecutive quarters, the company has topped analyst estimates. It beat the mark by one cent in the second quarter and by 2 cents in the first quarter. Net income has increased 40.2% year-over-year on average across the last five quarters. The company continues to be undervalued and exceed analyst expectations. There is no reason the upward is going to end in 2013.

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