This Week's 5 Smartest Stock Moves
Jan 24th 2014 4:45PM
Updated Jan 24th 2014 4:46PM
If you're feeling good about the market, you're not alone. Take my hand as we go over some of this week's more uplifting headlines.
1. The American price
It seems that a week doesn't go by without Tesla Motors making waves. This week it was the maker of luxury electric sedans announcing that it won't be marking up its Model S in China the way that other premium automakers have in the past.
"This pricing structure is something of a risk for Tesla, but we want to do the right thing for Chinese consumers," Tesla explains in the blog entry announcing the launch of its online design studio for sedan buyers in China.
Nice. We don't know how big a market China will be for Tesla. The Model S isn't cheap even without the typical premium. However, Tesla's setting the right tone in distancing itself from the competition in a country with a mandate to embrace electric passenger vehicles.
2. Apple grows up
The Wall Street Journal is reporting that Apple will be rolling out a pair of iPhones with larger screens later this year. Chatter about Apple going bigger with the iPhone to catch up to Android's best-selling devices has been going around for some time, but it's always welcome to hear it refreshed from new sources.
The report claims that a device with a screen bigger than 4.5-inches is further along in development than a larger 5-inch model, but both could be out later this year, when Apple has historically updated its smartphone line.
3. Uncapping the upside
Netflix shares raced to a new all-time high on Thursday after the company posted blowout quarterly results, but let's key in on the tasty language offered up by the leading video service in hinting that plan rates may move higher as it switches to three pricing tiers in the future emphasis mine:
If we do make pricing changes for new members, existing members would get generous grandfathering of their existing plans and prices, so there would be no material near-term revenue increase from moving to this potential broader set of options. We are in no rush to implement such new member plans and are still researching the best way to proceed.
Before Wednesday's note, Netflix had routinely defended the $7.99 per month that it charges as fair and adequate. That's great for customers, but shareholders were left to ponder the upside given the addressable market for Netflix if $7.99 per month were the ceiling. Apparently it won't be that way forever.
4. It's all relative at Nuance
Nuance Communications has been a disappointing investment over the past few quarters, but the speech-recognition specialist saw its shares move 7% higher on Wednesday after it offered up preliminary financial results that landed just ahead of the numbers it put out two months ago when it hosed down its outlook.
Nuance is now expected to post an adjusted profit of $0.23 to $0.24 per share on $487 million to $491 million in revenue for the fiscal first quarter that ended last month. Back in November the guidance was for no more than $0.21 a share on $487 million in adjusted revenue.
Hold those confetti launchers! Nuance earned $0.35 a share on $492.4 million in adjusted revenue a year earlier. We're still looking at a slight decline on the top line and a sharp drop on the bottom. However, it's still refreshing to see a company begin to push projections higher in any capacity. It means the situation isn't as dire at Nuance as the company thought it would be just before Thanksgiving.
5. Amazon may be thinking inside the box
The week kicked off with reports that Amazon.com was in talks with media giants to introduce an Internet-based pay-TV service. The online retailer eventually denied the reports, but that's probably what it would've said if the talks had yet to turn fruitful.
If the reports are accurate -- and if Amazon is able to pull this off -- this could be pretty big for a company that has already been beefing up its streaming-video platform. It's no Netflix, but its ecosystem is already in place for digital rentals, purchases, and unlimited streams.
Watch this space.
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The article This Week's 5 Smartest Stock Moves originally appeared on Fool.com.Longtime Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends Amazon.com, Apple, Netflix, Nuance Communications, and Tesla Motors. The Motley Fool owns shares of Amazon.com, Apple, Netflix, Nuance Communications, and Tesla Motors. 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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