JPMorgan Chase Raises Detroit Investment by $50 Million

In 2014, JPMorgan Chase unveiled a revitalization project on Detroit city wherein it pledged a $100 million investment plan spanning over five years. The bank has now announced it will add $50 million to the expedition by 2019.

The undertaking has proved quite valuable to Michigan’s most populous city, particularly by constructing real estate developments, corroborating startups in scaling up, tutoring unskilled persons for new jobs, and most importantly, demonstrating an urban revitalization model that can be replicated to other cities across the globe. It is salient to note that a number of key aspects (besides funding from the banking corporation) have paved way for the scheme’s success. One of them is a collaborative approach that has involved a cadre of local partners including political leaders, local investment funds and charity organizations. Peter Scher, corporate responsibility chief at JP Morgan, mentions that coordination amongst the aforementioned players has been undoubtedly the deal breaker.

Reference

https://www.usatoday.com/story/money/2017/05/10/jpmorgan-chase-detroit-investment/101504994/

Apple Stock Hit by Lower iPhone Sales

To start, it is worth mentioning that in just one quarter, Apple’s cash reserve rose almost $10.6 billion to $256 billion. This is more than the market capitalization of General Electric, and the GDP of Finland and Jamaica combined. With all that Cash, Apple can buy the whole of the US second biggest oil company Chevron, four Gerald R. Fordclass aircraft carriers, and more than 700,000 Tesla model S electric cars. However, CEO Tim Cook has confirmed that Apple would be returning its cash back to the shareholders in the form of a $50 billion new shares buyback and a 63-cent dividend.

In recent results announcement, Apple announced that the commodity that helps Apple make all that cash has seen a dive in its sales. Much of it is due to rumors in China of a new iPhone, the way Chinese phones have been gaining ground against Apple Inc’s iPhone and Samsung Electronics Co. Galaxy phones and the wait for a new much improved and more powerful iPhone this fall, which the company bets on as its biggest overhaul in design and product development cycle. Around 50.8 million iPhones were sold this quarter ending April 1, down from 51.2 million units in the same period a year earlier.

Although Apple’s stock has risen 27 percent this year, the fewer iPhone sales dragged it down 2 percent, taking NASDAQ with it. The co-founder of Loup Ventures and a former veteran Apple analyst, Gene Munster said, “We agree with the market that a bet on shares of Apple is a bet on the company’s ability to transition from their existing iPhone platform to an augmented reality-driven platform in the future. Currently, there are many rumors of a new Anniversary edition iPhone 8 coming, which has slowed down the sales of current iPhone products. Apple also intends to introduce a new Apple product that will compete with Google Home, a new Augmented reality platform.

References

https://www.washingtonpost.com/business/economy/apples-cash-pile-is-as-big-as-the-gdp-of-finland-and-jamaica-combined/2017/05/01/192d082c-2e7d-11e7-9dec-764dc781686f_story.html

http://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-record-256-8-billion.html

https://www.bloomberg.com/news/articles/2017-05-02/apple-sells-fewer-iphones-in-latest-quarter-as-consumers-wait

Costco Shareholders to Receive Big Treats in May

While the US retail sector is going through its worst time amid under the criticism that it might be the next big credit bubble, Costco Wholesale Corp. is giving its shareholders a special cash dividend of $3.1 billion on May 26.

Costco was already paying its shareholders $0.5 cents more in the quarterly dividend, but they’re $7 per share more this time had made headlines. The special cash dividend will be paid on additional borrowings and current share reserves. Costco shares have been rising since the press release came this week,

Costco wants to reassure its shareholders that they are still in a healthy financial position to foresee this current retail credit crunch. Costco Executive Vice President and Chief Financial Officer, Richard Galanti said, “Today’s announcement of a $7.00 special dividend is our latest step in returning capital to our shareholders. Our strong balance sheet and favorable access to the credit markets allow us to provide shareholders with this dividend while preserving financial and operational flexibility to continue to grow our business globally.”

Many analysts are also upbeat on Costco, due to its prudent financial management and steady cash flows. An analyst at UBS Group AG, Michael Lasser said, “Against a challenging retail backdrop, Costco’s unique membership model helps give it a degree of predictability that’s rare in the sector today. This has led to steady cash flow generation, which in turn helps support its decision to issue its third special dividend in the past five years.”

References

https://www.bloomberg.com/news/articles/2017-04-25/costco-to-return-3-1-billion-to-investors-with-special-dividend

http://markets.businessinsider.com/news/stocks/costco-stock-price-cost-special-dividend-shareholders-2017-4-1001952898-1001952898

https://www.thestreet.com/story/14104198/1/costco-stock-soaring-on-special-cash-dividend.html

Dalian Wanda Investing $10 billion in Chinese Healthcare Sector

Chairman Wang Jianli of the Dalian Wanda Group Co. is stepping up his efforts to increase investment in the private health care sector of China. The $10 billion investment is desired to go for a health park in Chengdu, southwestern China. The $10 billion health park will comprise of two general hospitals, eight specialized hospitals, and 30 related health-care companies. $2.3 billion is specifically dedicated to three big international hospitals in the Chinese cities of Shanghai, Chengdu, and Qingdao.

Since much of the current Chinese healthcare providers are suffering from overcrowded and busy schedules, as Chinese population moves towards a growing middle class in need of good health care services. Chinese authorities wish to increase investment by 20 percent, to reform and bring new facilities and providers. Dalian Wanda Group is, therefore, making its biggest ever investment in China, after seizing many other major investment ventures ranging from entertainment to property development.

In a statement issued by Chairman Wang, “Bringing a toplevel international hospital brand to the Chinese market is a new innovation in China. It not only satisfies the growing healthcare needs of the country’s affluent population, but also helps the cities in which these projects are located to elevate their healthcare standards to international levels, and to serve as role models for the development of premium healthcare in China.

References

http://www.reuters.com/article/us-dalian-wanda-healthcare-idUSKBN17C0YI

https://www.ft.com/content/f00132d8-0590-399e-ac17-e6bea73debad

https://www.bloomberg.com/news/articles/2017-04-10/billionaire-wang-to-invest-10-billion-in-china-health-care-park

Tesla Surpasses GM as Most Valuable US Automaker Despite Losses

Tesla reported losses of $121.3 million, or 78 cents a share in their quarterly reports in February, while CFO Jason Wheeler also decided to leave in April 2017. Still, Elon Musk confirmed that production of Model 3 will resume in July and reach production volume in September, helping fulfill a commitment of 5,000 Model 3 vehicles per week by the end of this year’s fourth quarter, raising it to 10,000 per week next year.

Nevertheless, Tesla’s losses, its ability to deliver and boost its cash reserves has helped Tesla max its market valuation and overtake its closest rival General Motor Co. to become the most valuable company in the US. On April 11, Tesla’s shares rose 3.3 percent, reaching a market capitalization of near $51 billion, which was $64 million more than that of GM. Tesla is just $1 billion shy of Honda, breaking into the list of the top 5 automakers in the world. Both GM and Tesla are competing for the crown of the best electric vehicle, as GM just released their Chevrolet Bolt, to compete with Tesla’s incoming Model 3 Sedan. However, there is still a difference over their balance sheets and financial performance, as Tesla might make a handsome loss of $950 million, while GM makes a big profit of $9 billion.

Considering Tesla’s current standing, it is ranked sixth biggest by market cap, yet still needs a long way to go while it reaches $172 billion worth of Toyota Motor Corp. Other high valued brands include Daimler AG, Volkswagen AG, BMW AG and Honda.

Regardless, many investors don’t feel Tesla deserve this high valuation and stock prices since it is primarily a battery company by design. Los Angeles-based DoubleLine Capital’s Jeffrey Gundlach, who oversees more than $105 billion in assets, said, “As a car company alone, Tesla is crazy high valuation. As a battery company – one that expands and innovates substantially – maybe the valuation can work.” Tesla wishes to sell 500,000 cars in 2018, while GM may top 10 million and Ford is expected to sell 6.7 million.

References

http://www.reuters.com/article/usa-stocks-tesla-idUSL2N1HC1JJ

http://www.cnbc.com/2017/02/22/tesla-earnings-q4-2016.html

https://www.bloomberg.com/news/articles/2017-04-10/tesla-passes-gm-as-musk-s-carmaker-becomes-america-s-top-valued

Imagination Tech Shares Plummet as Apple Abandons UK Chip Maker

Apple just abandoned one of its oldest suppliers, UKbased Imagination Tech, whose chip designs have been used in products dating as back as the first iPod. This provides a vital lesson for almost all of Apple suppliers that apple, a $750 billion company can bring ruins to anyone part of its supply chain within minutes. The shares of Imagination Tech opened 76 percent below their last close on April 3, 2017.

Imagination Tech received 40 percent of its revenues from Apple in 2016, while Apple invested $76 million in the company, and owns 8.5 percent stake in the company. Apple was also in talks to completely buy out the graphics chipmaker last year, before completely abounding it for its own in-house graphics chip for new products due to release later this year.

Nevertheless, the firm has threatened to take legal action against Apple and issued a statement saying “Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property, and confidential information. This evidence has been requested by Imagination but Apple has declined to provide it.

However, this is not the first time Apple has dropped its suppliers as Portal Player, Sigmatel, CSR, and Wolfson were all dropped without prior notice.

Other options for Imagination Tech are to move towards its MIPS technology used by Israeli automated vehicle driving systems specialist Mobileye (MBLY.N) and Chinese chipmaker Spreadtrum Communications while using its graphics chips in MediaTek processors and other Chinese manufacturers.

References

http://www.reuters.com/article/us-imagntn-tchnlgs-apple-idUSKBN1750HR

https://qz.com/948375/apples-aapl-latest-tweak-to-its-supply-chain-is-devastating-for-britains-imagination-technologies-img-l/

http://fortune.com/2017/04/03/apple-imagination-tech-shares-crash/

Dominos is Outperforming Everyone From Amazon to the Next Street Pizza Chain Near You

There has been talking about how Apple, Google, Microsoft or Amazon made to the top, but there is a pizza chain that has outperformed them for over a decade, while being under the radar, generating more than 2,000 percent of returns for its investors.

Domino’s Pizza in 2009, changed their pizza making recipe and after 2010, it has been able to outshine every other fast food and pizza chain. Their market share and market capitalization rose to $9 billion. Domino’s has already reached its target price of $113.20 set by many analysts and has the potential to rise above $127 or come down to $92. In either case, it has given more return over $1,000 invested than major technology firms such as Tesla, Netflix, Amazon, and Apple.

This has not gone well with other pizza joints such as Pizza Inc, and Pizza Hut, who are finding it hard to appeal to a growing number of customers, who not just wish for fast service, but a quality dough too. Another pizza joint Pie Five is shutting down fourteen of its stores in Illinois and Colorado and Texas to make up for the losses it has seen due to fierce competition.

Domino’s has responded back since 2010, engaging customers through a newly revamped app, new emojis, new delivery vans and a faster service

However, on the financial side, Pizza Hut has better profitability in the UK despite giving steep discounts to its customers across the wide spectrum of items, and Domino’s has lost market share. Nevertheless, Dominos still wishes to open 80 new stores and generate 3,000 new jobs in the UK.

References

http://www.nasdaq.com/article/cps-crosses-above-average-analyst-target-cm761527

http://www.ctpost.com/business/article/Upstart-pizza-chains-close-as-Domino-s-keeps-11025530.php

https://qz.com/938620/dominos-dpz-stock-has-outperformed-google-goog-facebook-fb-apple-aapl-and-amazon-amzn-this-decade/