This Week's 5 Smartest Stock Moves

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. Apple jacks
iPods? We don't need no stinkin' iPods!

Apple (Nasdaq: AAPL  ) came through with yet another blowout quarter, despite suffering a 20% slide in iPod sales. After all, who needs those cheap portable media players to hold up when sales of pricier iPhones and iPads more than double? They're all iOS ambassadors anyway!

Even the seemingly ho-hum performance of its Macs -- growing merely in the teens -- is better than industry reports of the PC industry.

The end result is that revenue soared 82% to $28.57 billion, and earnings soared 125% to $7.79 a share. Analysts figured that Apple would earn just $5.80 a share on less than $25 billion in revenue.

Apple landing ahead of the pros is a quarterly ritual that probably goes all the way back to Steve Jobs' first black mock turtleneck. However, this quarter was a sound thrashing even when stacked against the company's historical beatings.

2. Amazon's troublesome Tribbles
Amazon.com
(Nasdaq: AMZN  ) smells an opportunity to stand out in video streaming, and like those quickly multiplying furry Tribble critters from the original Star Trek, the key appears to be more content.

Amazon struck a content licensing deal with CBS (NYSE: CBS  ) this week, giving it access to entire seasons of 18 classic shows, including Star Trek, Cheers, and Medium. The roughly 2,000 episodes will be available to its Prime loyalty shopping members at no additional cost. The move pushes Amazon's digital catalog available to Prime users at 8,000.

Sweet timing, right? The streaming smorgasbord leader is dramatically tweaking its pricing model, so in comes Amazon to take over the value end of the market.

3. Teaching Quepasa a new language
Quepasa
(AMEX: QPSA  ) hasn't been able to transform its namesake portal into the Facebook for Latinos, so it's buying itself a new life.

Quepasa will be paying $100 million, mostly in stock, to acquire the parent company of myYearbook. This is a pretty big deal for a company that commanded a market cap of only $112 million just before the purchase was announced.

The reason this makes the "smart" move cut is because it will more than double Quepasa's size, emphasizing the lucrative opportunities in social gaming.

Insider Guides' myYearbook generated $4.9 million in EBITDA last year, as revenue climbed 53% to $23.7 million. Quepasa posted an operating loss on a mere $6.1 million in revenue last year.

The appeal of myYearbook is that it's a popular social site that relies on casual games and a proprietary virtual currency to turn gaming strangers into friends. Given the ridiculous valuations being bandied about for Zynga's upcoming IPO, it's a great place for the new and improved Quepasa to be.

4. Broker poker
Shares of E*TRADE (Nasdaq: ETFC  ) soared 14% on Wednesday, after its largest investor suggested that the discount broker smoke out a suitor.

You know that a pairing makes sense when larger rival TD AMERITRADE (Nasdaq: AMTD  ) -- the likely buyer -- also saw its stock climb 6% on the news.

Trading volumes have been sluggish for the industry in recent months, but E*TRADE was able to post improving bottom-line results through a refreshingly sharp drop in loan loss provisions.

One can argue that the E*TRADE Baby parent doesn't need to get hitched now that it's profitable and cleaning up its once problematic banking operations, but E*TRADE and TD AMERITRADE would look so good together.

Get a room already, you two!

5. Baidu goes for a two-fer in China
Baidu
(Nasdaq: BIDU  ) gave investors a double dose of good news this week, sending the stock to nearly hitting a fresh all-time high at a time when many of China's dot-coms are sputtering.

China's leading search engine began offering a free Internet browser on Monday. Having a popular browser hasn't historically translated into a spike in search engine traffic, but everything that Baidu can do to guide the online experience will pay off in the long run.

On Tuesday, Baidu announced a content licensing deal with three major record labels, beefing up its efforts to offer free ad-supported music streams and downloads. Baidu is trying to shake its reputation as a source for third-party pirated music files, and offering free access to legal content is a win-win for the labels and Baidu.

The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple, Baidu, and Amazon.com, as well as creating a bull call spread position in Apple. 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.

Longtime Fool contributor Rick Munarriz is an optimist at every turn. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1523383, ~/Articles/ArticleHandler.aspx, 8/29/2014 2:03:48 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement