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Fly News Breaks for September 13, 2018
Sep 13, 2018 | 08:16 EDT
JPMorgan analyst Robbie Marcus recommends investors use yesterday's weakness in shares of iRhythm Technologies (IRTC) as a buying opportunity. The stock sold off sharply after Apple (AAPL) announced that its new Watch Series 4 had received FDA approval for a built-in electrocardiogram scanner, Marcus tells investors in a research note. While the headline looks like a "notable headwind" for iRhythm, a closer look at the new device shows that this new feature poses almost no competitive threat to the company's Zio XT or AT offerings, Marcus contends. He does not see Apple turning the Watch into a regulated medical device approved for clinical diagnosis. The Apple Watch is approved for over-the-counter use and is not a continuous monitor, the analyst points out. Marcus believes Apple attaining an approval with a similar label to iRhythm's Zio "would significantly slow the rate of innovation and put the consumer device at the whim of the FDA." Instead, he expects that greater consumer preliminary screening for heart arrhythmias will only expand the number of patients seeking medical diagnosis, which, he feels, would benefit iRhythm. The analyst keeps an Overweight rating on the shares.
News For IRTC;AAPL From the Last 2 Days
Jan 24, 2019 | 05:47 EDT
Apple dismissed just over 200 employees this week from its autonomous vehicle group called Project Titan, CNBC reports, citing people familiar with the matter. An Apple spokesperson told CNBC: "We have an incredibly talented team working on autonomous systems and associated technologies at Apple. As the team focuses their work on several key areas for 2019, some groups are being moved to projects in other parts of the company, where they will support machine learning and other initiatives, across all of Apple. We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever." The dismissal of over 200 employees is seen as anticipated restructuring under new Project Titan leader Doug Field, CNBC says. Reference Link
Jan 23, 2019 | 09:56 EDT
Shares of Qualcomm (QCOM) are under pressure after Kerrisdale Capital said it is short the stock as the company's "imminent loss" in its ongoing trial against the Federal Trade Commission is "more serious" than the market thinks because it "accelerates the demise" of its patent licensing business. SHORT QUALCOMM: In a newly published report, Kerrisdale Capital called Qualcomm a "semiconductor company teetering on the brink of disaster" and said it is short shares of the company. "The licensing business, despite contributing far less revenue than the chip business, has historically supplied roughly two thirds of Qualcomm's profits, thanks to its extremely high profit margins. This unusual business model is living on borrowed time. In the past few years, regulators across the globe have concluded that Qualcomm's ability to extract massive licensing fees from devicemakers like Apple [AAPL] and Samsung [SSNLF] stems not from the quality of its patents but from unlawful monopolistic tactics. In particular, authorities in China, Taiwan, Japan, South Korea, Europe, and the United States have found fault with what they see as Qualcomm's exploitation of its dominance in the market for premium modem chips [...] to force device-makers to pay outrageously high patent royalties, even on devices that don't contain Qualcomm chips, all while refusing to license its IP to potential competitors. These core Qualcomm business practices, regulators contend, violate binding pledges the company has made to license critical patents on 'fair, reasonable, and non-discriminatory' terms, including to rivals like Intel [INTC]," the report reads. Kerrisdale Capital believes the FTC has brought "a powerful legal case against the company," with the trial currently underway, and thinks Qualcomm will lose. "Perhaps because prior legal troubles have 'merely' cost Qualcomm billions of dollars without fundamentally transforming its business model, the market has failed to appreciate the potentially dire consequences of the current trial. If the judge grants the FTC the remedies it seeks, forcing Qualcomm, among other things, to license core patents to competitors and to renegotiate all of its existing licenses on fair terms, it could realistically cut Qualcomm's licensing revenue, earnings power, and stock price in half," Kerisdale argued. PRICE ACTION: In morning trading, shares of Qualcomm have dropped over 3% to $52.51.
Jan 23, 2019 | 09:41 EDT
OTR Global said its checks with hardware buyers and product managers at wireless carriers, wholesalers, and electronics retailers in Asia and Europe indicate that Apple's iPhone lost share in Europe, China and India during Q4 and that expectations for iPhone order share during Q1 are significantly lower.