Tuesday, November 13, 2012

News Recap: Apple Inc. (NASDAQ:AAPL), Tripadvisor Inc (NASDAQ:TRIP)

Shares of Tripadvisor Inc (NASDAQ:TRIP) surge 2.50% to $34.98 following the reviews of Morgan Stanley Internet analyst Scott Devitt.

Devitt has upgraded his rating to Overweight from Underweight.  He has further revised his Price Target to $41, a rise by 32% from its prior Price Target.

“We believe management is altering its monetization strategy for the better by testing a Meta display and improving bidding visibility for advertisers,” he writes in a research note. “We expect hotel shopper growth to remain robust and pricing headwinds to dissipate, leading to TRIP meaningfully beating 2013 consensus estimates.”

The three primary reasons for his upgrade are firstly Monetization as the company shifts it model form pop-up windows to a metasearch display which will improve the user experience and become a source of income as it will lift in conversion rates for advertisers. Secondly Growth of the company where Devitt sees a 4-year growth at 17% compounded, up from a previous estimate of 15%. Thirdly it will be cheap as Devitt says the Priceline deal for Kayak comes at 18x 2013 EBITDA, and 38x EPS, highlighting “the significant value of online travel companies at the top of the funnel.”

Sterne Agee analyst says that Apple Inc.(NASDAQ:AAPL) will receive $6 to $8 for every Android-based HTC phone sold. Apple and HTC announced a patent settlement and a 10 year licensing deal late Saturday night, terms of settlement for which were not yet disclosed.

Should Investors Buy AAPL After The Recent Slump? Find Out Here

For the sale of 30-35 million Android smartphones annually HTC generates $180-$280 million in annual revenue for Apple which is a sure profit as no cost is associated with it. But this money does not matter a lot for Apple as it earned $41 billion in net income during its last fiscal year.

HTC also reportedly send $5 to Microsoft for every Android-phone it sells. This means it's paying $11-$13 per phone for patents.

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