The Zacks Analyst Blog Highlights: Virgin Media, Liberty Global, Netflix,
Amazon.com and Stryker
CHICAGO, March 7, 2013
CHICAGO, March 7, 2013 /PRNewswire/ --Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Virgin Media Inc. (Nasdaq:VMED),
Liberty Global Inc. (Nasdaq:LBTYA), Netflix Inc. (Nasdaq:NFLX), Amazon.com
(Nasdaq:AMZN) and Stryker Corporation (NYSE:SYK).
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Here are highlights from Wednesday's Analyst Blog:
Virgin Media to Offer Net Streaming
Virgin Media Inc. (Nasdaq:VMED), a leading cable multi service operator (MSO)
of the United Kingdom, is planning to offer video streaming as a service
following its takeover by media conglomerate Liberty Global Inc.
(Nasdaq:LBTYA). Currently, Virgin Media offers entertainment and communication
services to the retail and enterprise customers.
Currently, higher adaptations of Internet service are restricting users from
downloading large multimedia files and videos quickly. Streaming services
resolve this issue as they display the images before the completion of the
entire download. Internet users find it easier to view movies or live games
via streaming, thus affecting the market share of cable MSOs.
In an attempt to take advantage of the current boom in the streaming service
industry, Virgin Media wants to come up with its own streaming option. Virgin
Media wants to add as much content as they can on the streaming platform to
popularize the service among its customers. Offering this service will put the
company in direct competition with low-cost streaming companies like Netflix
Inc. (Nasdaq:NFLX), Amazon.com (Nasdaq:AMZN) and Hulu.
Last month, Liberty Global agreed to acquire Virgin Media for a total
consideration of around $16 billion. The deal, once completed, will produce
cost synergies of $180 million for Liberty Global, apart from helping the
company to establish a strong foothold in the BSkyB dominated U.K. cable
BSkyB has 10.7 million subscribers, compared with Virgin Media's 4.9 million.
Successful integration of Virgin Media with Liberty Global will create a
dominant force in the highly lucrative U.K. pay-TV market and will allow it to
compete better with streaming companies. We believe this is a strategic move
by Virgin Media to retain its customers, who are switching to streaming
companies to negate their high cable bills.
On the downside, however, providing streaming service from its own portfolio
could dampen the future prospect of Virgin Media's own cable business. As
customers will be able to watch their favorite shows via streaming, they could
eventually switch to a lower monthly cable plan, thus impacting the company's
Currently, Virgin Media carries a Zacks Rank #4 (Sell).
Stryker Completes Takeover of Chinese Firm
Stryker Corporation (NYSE:SYK) recently reported the successful conclusion of
its voluntary offer to purchase Trauson Holdings Company Limited. Based in
China, Trauson's offerings include trauma-related products.
The acquisition will enable Stryker to grow market share in the value-oriented
orthopedic segment in developing nations. The deal is not expected to impact
Stryker's earnings per share for 2013.
One of the driving factors behind Stryker's sales growth is the on-going
turnaround in the company's core Reconstructive business, which may further
improve going forward. Revenues from Stryker's core Reconstructive unit (which
offers replacement hip, knees and extremities products) increased 6.7% (or
7.4% in constant currency) to $1,046 million in the latest quarter. This
reflects a marked acceleration from the 1.1% growth achieved in the previous
quarter. It also implies improving reconstructive market fundamentals.
Besides, U.S. Reconstructive sales jumped 13.9% year over year in the quarter.
Stryker, with a market-cap of $24.7 billion, is one of the world's largest
medical device manufacturers operating in the global orthopedic market. The
company's well-diversified product portfolio, expanding foothold in emerging
markets along with acquisitions are expected to drive future growth.
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